Term Paper

CONFECTIONERY PRODUCTS: Confectionery items include

sweets, lollies, candy bars, chocolate and other sweet items of snack food.

The term does not generally apply to cakes, biscuits or puddings which

require cutlery to consume, although exceptions such as petits fours

or meringues exist. Speakers in the United States do not refer to these items

as "candy."

American English classifies many confections as candy. The many

categories and types of candy include:

Hard candy : Based on sugars cooked to the hard-crack stage,

including suckers (known as boiled sweets in British English),lollipops,

jawbreakers, lemon drops, peppermint drops and disks, candy canes, rock

candy, etc.

Fudge : Although some people regard any soft, chocolate-flavored

confection as 'fudge', the name properly refers to a confection of milk and

sugar boiled to the soft-ball stage.

Toffee  (or Taffy): Based on sugars cooked to the soft-ball stage and then

pulled to create an elastic texture.

Tablet : A crumbly milk-based soft candy, based on sugars cooked to the

soft-ball stage. Comes in several forms, such as wafers and heart shapes.

Chocolates : Used in the plural, usually referring to small balled centers

covered with chocolate to create bite-sized confectionery. Chocolates

should consist of almost all chocolate.

Liquorice : Containing extract of the liquorice root. Chewier and more

resilient than gum/gelatin candies, but still designed for swallowing. For

example, Liquorice allsorts.

However not all confections equate to "candy" in the strict sense. Non-candy

confections include:

Pastry : A baked confection whose dough is rich in butter, which was

dispersed through the pastry prior to baking, resulting in a light, flaky

texture; see also pie and tart.

Chewing gum : Uniquely made to be chewed, not swallowed.

Gum/Gelatin candies: Based on gelatins, including gum drops,

jujubes, Turkish delight, jelly beans, gummies, etc.

Ice cream : A suspension of microscopic ice crystals in cream; also ice

cream cones.

Marshmallow : "Peeps" (a trade name), circus peanuts, etc.

Marzipan : An almond-based confection, doughy in consistency, and often

formed into shapes mimicking (for example) fruits, which marzipan-

makers can then paint with food colorants.

All Categories of Confectionery

Almond Chocolates

Chewing Gum

Confectionery Shops and Distributors

Ice Cream

Milk Chocolates

Almond Nut Chocolate

Chocolate

Fruit Candies

Licorice

Milk Toffee

Candy Bars

Chocolate Slab

Fudge

Lollipops

Toffee

CHOCOLATE

Chocolate is a mixture of cocoa paste, cocoa butter, and sugar. Nowadays, we know its precise chemical composition. It is considered as a complimentary food, since all three organic substances exist (although not well balanced):

carbohydrates (starch, diverse sugars), fats (cocoa butter), and vegetable proteins. Minerals can also be found in chocolate: potassium and magnesium in large amounts, calcium and sodium in small amounts, and iron in trace amounts. Chocolate also contains vitamins A1, B1, B2, D, and E.

THE BENEFITS OF CHOCOLATE 

The pharmaco-dynamic substances (those whose action is similar to medications) found in chocolate is responsible for its reputation concerning its abilities. Four of these such substances can be found in chocolate: theobromine, caffeine, phenylethylamine, and serotonin. They appear in a negligible quantity, but each in infinitely small quantities plays an important role. Theobromine stimulates the central nervous system, facilitates muscular efforts, as well as having diuretic and cardiotonic action. It is an orexigan (appetite stimulator). Caffeine increases resistance towards fatigue, favorises intellectual activity, and increases watchfulness. Concerning phenylethylamine, it has a chemical structure similar to amphetamines and therefore contains psycho-stimulating properties. Serotonin, on the other hand, is a neurotransmitter (substance freed by the nerve endings) in the cerebral cortex--its quantity is often found to be lower during certain nervous depression states. The serotonin found in chocolate helps correct its initial loss. Likewise, the caffeine and saccharose stimulate the body's stimulation of serotonin. Finally, due to the pleasure it offers, chocolate stimulates endorphin secretion thus procuring naturally the same effects as opium. With this description of chocolate's chemical composition, it's never-ending list of vertues are easily explained.

Major PlayersThe major players in the chocolate market are:

Cadbury India Ltd. Nestle India Ltd.

They both account for 90% of the market share. 

Other players are:

1. Ferrero RocherThe three layers of the alluring chocolate is a winner on its own accord. First the milk chocolate, a bite of the crunchy wafer and cream and then the roasted hazelnut core. On top of that the glittery golden package. The tempting sphere is the ideal choice for the top rung.

2. Swiss Thins (LINDT)The not so sweet chocolate has been a worthy pick for the last 160 years. The Switzerland based brand was built in 1845. The brand has contributed too many chocolate bars that are well known amongst all ages. Black chocolate is its forte. Sold in over 80 countries, the brand gives nothing short of quality.

3. GuylianIt hit the market pretty late. However the milk chocolates produced by the brand cannot be ignored at all. Guylian chocolates are a bit more on the sweeter side and are appropriate for sweet lovers. It even abounds in variety and can be selected from a huge range of assortments.

4. Maxinm’sThis is one of the high priced chocolates available in the market. Satisfying the chocoholics for a century now, the Maxinm’s are a symbol of elegance and class. The name itself has its reference in France mythology. The brand is infamous for the series of assortments that are highly exquisite. It ranges from milk chocolates to black chocolates and hazelnut milk chocolates.

5. Ducd’OMilk chocolates, black chocolates or white chocolates. Pick your choice. Ducd’O offers a range of compound chocolates for a variety of taste buds. One can easily pick up a white chocolate if he detests bitter taste. If one prefers bitter to sweet, black chocolate is the ideal one. However, milk chocolate will satisfy the quest for both bitter and sweet.

6. Kinder BuenqThis brand features wafer as an essential addition to its soft chocolate. With a relatively average price, the brand widely reaches out to the chocolate lovers. The bright packaging makes the chocolate worth the bucks.

7. Dcolse

If there is any chocolate that stands out from the rest, it is Dcolse. What makes the difference perhaps is skillful packing and thus it has been alluring the lovers round the world. The company originated in Belgium and remains one of the most favorite chocolate brands.

8. M&M’sPeople in US are strict admirers of this chocolate. The colorful display of the candies is appealing to the eyes. The chocolate comes in different colors like green and yellow and are coated with candies. Each piece has the letter ’M’ imprinted on it. There are a variety of candies like milk chocolate, mint, dark chocolate and peanut chocolates.

9. BelgianAs the name suggests, this chocolate originates from no place other than Belgium. Belgium ranks amongst the world’s foremost producer of chocolates. The Belgian chocolates scores high on quality and taste. The brand   makes use of upgraded technologies to remain at par with the other big names.

10. ToffifeeToffifee provides a cheaper resort to people. The chocolate markets in different flavors and has a classic essence. Even the ordinary flavor is anything but ordinary. It is Germany’s largest chocolate production base.

Chocolate Market in India

Facts & Figures 

1. Chocolate market is estimated to be around 1500 crores (ACNielson) growing at 18-20% per annum2. Cadbury is the market leader with 72% market share3. The per capita consumption of chocolate in India is 300 gram compared with 1.9 kilograms in developed markets such as the United Kingdom4. Over 70 per cent of the consumption takes place in the urban markets5. Margins in the chocolate industry range between 10 and 20 per cent, depending on the price point at which the product is placed6. Chocolate sales have risen by 15% in 2007 to reach 36000 tonnes according to one estimate. Another estimate puts the figure at 25000 tonnes7. The chocolate wafer market (Ulta Perk etc) is around 35 % of the total chocolate market and has been growing at around 13% annually

8. As per Euromonitor study, Indian candy market is currently valued at around USD 664 million, with about 70%, or USD 461 million, in sugar confectionery and the remaining 30%, or USD 203 million, in chocolate confectionery9. Entire Celebrations range marketshare is 6.5%10. The global chocolate market is worth $75 billion annually

Companies 1. The chocolate market in India has only three big players, Cadbury, Nestle and Amul2. New brands such as Sweet World, Candico and Chocolatiers are present in several malls3. The largest target segment for Cadbury is youth4. Delhi-based Chocolatiers, started with a small shop in south Delhi’s Chittaranjan Park and has now ventured into malls and multiplexes in NCR, Mumbai and Bangalore, with focus on high-end or designer chocolates, a niche market of their own5. Candico India is aiming for 400 locations across malls and multiplexes in the country by 2010.

Companies & Brands 1. Cadbury - Cadbury, 5 Star, Bytes (chocolate snack), Celebration, Dairy Milk, Gems, Perk2. Nestle - Bar One, Kit Kat, Milkybar, Munch, Nestle3. Amul - Amul (Chocozoo, Chocomines)4. Dairy Milk is the market leader5. 5 Star (heritage brand which came to India in 1969) has a marketshare of over 14%

Chocolate Players

NESTLENestle, headquarters in Switzerland, was founded by Henri Nestle in 1866. It

is renowned as the world’s leading nutrition and health based company.

Nestle grows is product line through innovation as well as renovation and

maintains a balance on its geo-environmental activities and product lines.

They opt for long term performance rather than short term goals. The

Company prioritizes in bringing the most relevant products to the consumers

according to their needs that will prove valuable throughout their life.

Manufacturing Units of Nestle India:Nestle India Limited initiated its workings in India with the Moga unit in

Punjab in 1961; succeeded by the Choladi unit located in the state of Tamil

Nadu. The Moga unit dealt entirely with the proper management of dairy

products whereas the Choladi unit diverted its interests to the tea industry.

The main purpose behind the set up of Choladi unit was to treat the tea crop

to produce soluble tea. Nestle India Limited is also the proud of owner of

Nanjangud unit in Karnataka; Samalkha unit in Haryana; Ponda and Bicholim

units in Goa; and Pant Nagar unit in Uttarakhand.

Performance of Nestle India:

Nestle India's popularity is visible in its financial figures published for the second quarter starting from April and ending in June 2007. The net profit for this quarter records a growth of 18.1%, amounting to Rs. 95.7crores, and the net sales figure marks a rise of 23.2%; whereas the exports delineate improvement by 15.6 %, which is calculated as Rs. 82crores. The net domestic sales have also grown at a very fast pace to Rs. 756.9 crores, showing a jump of approximately 24 %, when compared with the financial figures of the same period, that is, from April to June in the previous year.

Various products offered by NESTLE PVT LTD. Munch Bar-One Kit-Kat Milk Curd Milky bar Polo Candy

SWOT ANALYSIS OF NESTLE PVT LTD

STRENGTHS:

• Globally recognized as one of the largest and powerful food producers,

covering almost every country (factories and plants).

• Employs approximately 280,000 people globally.

• Powerful brand positioning in the consumers mind.

• It has a vastly diversified product portfolio containing approximately 6000

brands (beverages, ice creams, frozen food items, chocolates and biscuits,

pet care nutrition items, etc.)

• It has established joint ventures with giants like Coca Cola, General Mills

and L’Oreal that are helpful in providing knowledge on different technological

aspects.

• Consistently ranked as largest bottled water corporation that operates in

an environmental friendly manner.

• Top 50 list of Fortune’s ‘America’s Most Admired Food Companies’, and

ranked on top on Consumer Food Products.

• Strong internal growth and emphasis on innovation internally.

• Strong cultural environment, that acts as a loyalty carrier for the

employees.

• Nestle has taken a visionary step as being one of the many companies that

represent and encourage globalization that has also become an identity for

its logo.

• Quality is a vital element regarding nestle products.

• Largest consumer products organization that operates globally.

• It also sells professional brands to different customers such as colleges,

hotels, restaurants etc.

• Powerful marketer, and never seizes any opportunity to embed the brand

image in the mind of the consumer. The quality of the Nestleproducts

embeds an element of trust in the mind of the consumer that

makes Nestle one of the powerful brands to be followed.

• Produces low cost products that give them an edge to their competitors. It

also has low operating costs.

• Globally, biggest ice-cream producer, having a market share of

approximately 17.5% (2006).

• The name Nestle also visualizes the high standard and quality of the

product.

• Customer base loyalty for Nestle is very vast and powerful.

• The decentralized culture in the organization encourages employees.

• It has a dynamic and innovative approach when it comes to new trends

regarding the technology.

WEAKNESSES:

• Hovering over the stats of 2008, the food industry grew 8.9%

butNestle lacked the potential to raise their sales in the organic food division

that lay flat.

• Regulators like FDA and AMA (American Medical Association) are pressing

on the firm for removing tags that hold no ground such as ‘low cholesterol’ or

‘heart healthy’. Parents have also reported diabeticepidemic due to the

consumption of such goods, in children especially. Promoting infant milk

products comparing to breastfeeding. Slaves in African countries that are

working under it. It holds up a negative effect regarding the whole brand.

• Retailers do not get to set high margins to indulge more in sales.

• Logistics cost is quite high.

• Many products are not understandable in different countries. It did not

make much of an impact in France with their LC-1 (food commodity).

• Coordination between country specific plants with the Center, due to which

some plants are running exceptionally smooth while operations in other

countries lack effectiveness.

• Transportation as well as storage (proper warehousing) problems.

• Supply Chain having a complex stature (India plant transitional

traceability).

• The immense diversification portfolio of the firm makes it impossible to run

every division smoothly.

• Russia being an unstable market for Nestle which cuts a big chunk

from Nestle’s bite.

• It is also perceived that Nestle puts profit first.

OPPORTUNITIES:

• Due to the high intensity of the health conscious awareness in the society,

more health based products are required especially with incompromisable

quality.

• Can go into the anti-allergy products that are very common, such as

peanut free or gluten free products.

• They can also invest in snacks that would further diversify its product

portfolio.

• Provide incentives to the retailers to increase sales volume.

• Open cafes that would exclusively provide Nestle products.

• LC-1 having the opportunity of having a greater impact in Germany (2

years had them go for 60% of the market share), and being the established

market leader, they can establish more brands in the market.

• Middle class share in most of the economies are growing much larger.

• Nestle India may hold the position of being the export hub due to the low

cost of labour comparatively to developed countries.

• In Asian countries like India, Pakistan, Bangladesh; consumers are mostly

price conscious rather than health conscious. Nestle has an opportunity to

have extensive strategies implemented to gain the market in such countries.

• Developing countries have a higher rate of GDP than those of developing

countries, Nestle should enter in such markets as well.

• Recession has created such an impact that the market is struggling and

has almost got out of that recession that will surely increase the cycle of

cash flow which will be profitable for Nestle to cash in on such a time.

THREATS:

• Contamination of products should be regarded strictly (Cookie Dough,

March 2009).

• The company has a not so pretty history with the FDA. Pet Food

contamination 2007 (imported from China, the vegetables contained rat

poison).

• Inflation rise is giving birth to high prices. Raw chocolate prices are

jumping, along with the Dairy costs; which leaves heavy cuts in the margin in

order to make the customers brand loyal. They have also shrink the

packaging which is not really noticeable, so the customers are paying the

same amount for a lesser product.

• Competitors like Cadbury Schweppes, Hershey’s, Quaker, Heinz, Del

Monte, Kellogg’s, and Kraft Foods are also well established. It’s a tough

market with a tougher competition for gaining market share.

• Market is quite mature and the competitors specialize in a certain product

that can hit hard on Nestle. (Yogurt Market US: General Mills)

• In the Indian market, fresh food is preferred than ready-to-eat meals.

• In still developing countries as well as underdeveloped countries,Nestle will

face a large competition in market both domestic and unorganized sectors.

• Poverty sector in developing countries is also a lacking that must be

watched over for.

• Malnutrition and obesity are yet another burden faced by the developing

countries.

 CADBURY

Cadbury, the global leader in the chocolate confectionery market, began in 1824 when a young Quaker named John Cadbury opened up a shop in Birmingham. John sold coffee, tea, drinking chocolate and cocoa at his shop. Believing that alcohol was a main cause of poverty, John hoped his products might serve as an alternative. He also sold hops and mustard. Like many Quakers John had high quality standards for all of his products.

At that time in England, Quakers were prohibited from attending university, since it was affiliated with the established church, and their pacifist beliefs kept them from joining the military. With few opportunities available, Quakers often went into business-related fields and/or devoted their time to missions of social reform.

By 1842 John was selling 11 kinds of cocoa and 16 kinds of drinking chocolate. Soon John’s brother Benjamin joined the company to form Cadbury Brothers of Birmingham. The Cadbury brothers opened an office in London and received a Royal Warrant (one of many) as manufacturers of chocolate and cocoa to Queen Victoria in 1854. Six years later the brothers dissolved their partnership because of John’s failing health and the death of his wife. They left the business to John's sons George and Richard. John devoted the rest of his life to social work and died in 1889.

George and Richard continued to expand the product line, and by 1864, they were pulling a profit. Cadbury’s Cocoa Essence, which was advertised as "absolutely pure and therefore best," was an all-natural product made with pure cocoa butter and no starchy ingredients. Cocoa Essence was the beginning of chocolate as we know it today. The brothers soon moved their manufacturing operations to a larger facility four miles south of Birmingham. The factory and area became known as Bournville.

With Cadbury’s continued success in chocolate, George and Richard stopped selling tea in 1873. Master confectioner Frederic Kinchelman was appointed to share his recipe and production secrets with Cadbury workers. This resulted in Cadbury producing chocolate covered nougats, bonbons delices, pistache, caramels, avelines and more. Cadbury manufactured its first milk chocolate in 1897. Two years later the Bournville factory employed 2,600 people and Cadbury was incorporated as a limited company.

During World War I, more than 2,000 of Cadbury’s male employees joined the Armed Forces. Cadbury supported the war effort, sending warm clothing, books and chocolate to the soldiers. Cadbury supplemented the government allowances to the dependants of their workers. When the workers returned, they were able to return to work, take educational courses, and injured or ill employees were looked after in convalescent homes. During this period trade overseas increased, and Cadbury opened its first overseas factory near

Packing room at Cadbury's Bournville factory..

Hobart, Tasmania. The next year Cadbury merged with JS Fry & Sons, a past market leader in chocolate.

Cadbury supported the war effort during World War II by converting parts of its factory into workrooms to manufacture equipment like milling machines for rifle factories and parts like pilot seats for Defiant fighter planes. Workers plowed football fields to grow crops, and the Cadbury St. John’s Ambulance unit helped people during air raids. Chocolate was considered essential for the Armed Forces and civilians. Rationing finally ended in 1949.

In 1969 Cadbury merged with Schweppes to form Cadbury Schweppes. Schweppes was a well-known British brand that manufactured carbonated mineral water and soft drinks. The merged companies would go on to acquire Sunkist, Canada Dry, Typhoo Tea and more. Schweppes Beverages was created, and the manufacture of Cadbury confectionery brands was licensed to Hershey.

Today Cadbury Schweppes is the largest confectionery company in the world, employing more than 70,000 employees. In 2006 the company had over $15 billion in overall sales. In March of 2007, Cadbury Scheweppes announced that it intends to separate its confectionery and beverage businesses. With almost 200 years in the business, Cadbury Schweppes will continue to prosper in the coming decades.

Interesting Facts about Cadbury

Cadbury was the first company to include pictures instead of printed text on chocolate boxes.

George Cadbury didn’t want to take mothers away from their children, so he developed a company rule that women had to leave work when they got married. Each married woman was given a bible and a carnation as wedding gifts.

In 1886 Cadbury became one of the first firms to have dining rooms with kitchens and food for sale.

A miniature metal animal (elephant, penguin, owl, fox, duck, squirrel, rabbit or turtle) was given away with specially designed cocoa tins in 1934. In the same year, Cadbury's tokens, which came with packs of cocoa, could be redeemed for lamps, kettles and saucepans.

So many children joined Cadbury’s Cococub Club that it had 300,000 members in 1936.

Cadbury’s World Visitor Center opened in 1990, welcoming 400,000 visitors in its first year.

Cadbury launched a Get Active program in 2003, helping 10,000 teachers get in shape.

Products offered by CADBURYS

Chocolate

1. Dairy mily

2. 5 star

3. Perk

4. Picnic

5. Bournville

6. Silk

Candy, gums and mint

1. Clorets

2. Halls

3. Bubbaloo

SEGMENTATION,TARGETING,POSITIONING OF CHOCOLATE INDUSTRY

The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are "most likely" to purchase your offering. If done properly this will help to insure the highest return for your marketing/sales expenditures. Depending on whether you are selling your offering to individual consumers or a business, there are definite differences in what you will consider when defining market segments. 

Category of NeedThe first thing you can establish is a category of need that your offering satisfies. The following classifications may help.

For businesses:

Strategic - Your offering is in some way important to the enterprise mission, objectives and operational oversight. For example, a service that helped evaluate capital investment opportunities would fall into this domain of influence. The purchase decision for this category of offering will be made by the prospect's top level executive management.

Operations - Your offering affects the general operating policies and procedures. Examples might be, an employee insurance plan or a corporate wide communications system. This purchase decision will be made by the prospect's top level operations management.

Functional - Your offering deals with a specific function within the enterprise such as data processing, accounting, human resources, plant maintenance, engineering design, manufacturing, inventory control, etc. This is the most likely domain for a product or service, but you must recognize that the other domains may also get involved if the purchase of the product or service becomes a high profile decision. This purchase decision will be made by the prospect's functional management.

For the individual consumer:

Social Esteem or Pleasure - Your offering satisfies a purely emotional need in the consumer. Examples are a mink coat or a diamond ring. There are some products that are on the boundary between this category and the Functional category such as a Rolex watch (a Timex would satisfy the functional requirement and probably keep time just as well).

Functional - Your offering meets a functional requirement of the consumer such as a broom, breakfast cereal or lawnmower.

Segmentation of NeedsThen you should establish what the need is and who is most likely to experience that need. Your segmentation will be determined by a match between the benefits offered by your offering and the need of the prospect. Some "need" categories for segmentation include:

Reduction in expenses:Prospects might be businesses that are downsizing (right sizing), businesses that have products in the mature stage of their life cycle or individuals with credit rating problems.

Improved cash flow:

Prospects might be businesses that have traditionally low profit margins, businesses that have traditionally high inventory costs or individuals that live in expensive urban areas.

Improved productivity:Prospects might be businesses that have traditionally low profit margins, businesses that have recently experienced depressed earnings or individuals with large families.

Improved manufacturing quality:Prospects might be businesses with complex, multi-discipline manufacturing processes.

Improved service delivery:Prospects might be service businesses in highly competitive markets, product businesses requiring considerable post-sale support or individuals in remote or rural areas.

Improved employee working conditions/benefits:Prospects might be businesses where potential employees are in short supply.

Improvement in market share/competitive positionProspects might be new entrants to a competitive market.

Need for educationProspects might be businesses or individuals looking for books on business planning, or seminars on Total Quality Management.

Involvement with social trendsProspects might be businesses concerned with environmental protection, employee security, etc. or individuals who believe in say 'no' to drugs, anti-crime, etc.

Specific - relating to product/service characteristicsProspects might be businesses or individuals interested in safety, security, economy, comfort, speed, quality, durability, etc.

Factors that segment prospectsHaving determined the more general segmentation characteristics you can proceed to a more detailed analysis of the market. There are literally thousands of ways to segment a market, but the following are some of the more typical segmentation categories.

For businesses:Industry by SIC code

This is especially beneficial for vertical market offerings.Size - revenues, # employees, # locations

In general if your offering is highly sophisticated, requires significant resources or provides greater value based on volume, then the target should be the larger enterprises.

Job position/responsibilityExamples of offerings might be planning software for managers or cleaning agents for maintenance managers.

ClimateExamples of offerings might be dehumidifiers in areas near the ocean or snow plows in northern areas.

Time related factorsSome services in this category are vacation related industries in summer and tax planners in the spring.

LanguageAn example of a language specific service is a Spanish TV channel.

Status in the industryYou might want to target businesses that are the technology leader or revenue leader or employee satisfaction leader, etc.

AccessibilityTo minimize promotion and sales expense you may want to target urban rather than rural or local rather than national prospects.

Future potentialA good example is how Apple Computer supplied products to schools at all levels to condition students graduating into the marketplace.

Ability to make a quick purchase decisionTargeting individual purchasers versus business committees can significantly reduce marketing expense and increase the probability of a quick close.

Access (or lack of access) to competitive offeringsCable TV business's significant investment in their service delivery system has allowed a near monopoly for some time. IBM's service reputation insured minimal competition during the mainframe days.

Need for customizationOfferings such as police cars, busses for municipalities and specialized computer systems fall into this category.

Product or service application to a business functionExamples are data processing, accounting, human resources and plant maintenance.

For Individual Consumers:Physical Size

Offerings might be big men's clothing, golf clubs for shorter players, etc.

Creation of or response to a fadExamples are hula hoops, Jurassic Park T-shirts, pet rock, physical fitness, etc.

Geographic locationMarketers take advantage of location by selling suntan lotion in Hawaii, fur coats in Alaska, etc.

Time related factorsYou may be able to target vacationers in summer, impulse buyers during the holidays or commuters at 7AM.

Demographics/culture/religionEthnic products would fall into this category.

GenderProduct examples are scarves for women, ties for men, etc.

AgeProduct examples are toys for children, jewelry for women, etc.

Social statusThis could include country club memberships, philanthropic contributions, etc.

EducationProduct and service examples are encyclopedias, scientific calculators, learning to read tools and financial counseling.

AvocationThis could include products for hunting, fishing, golf, art work, knitting, etc.

Special InterestsYou could target cat lovers, science fiction readers, jazz music collectors, etc.

AccessibilityBecause the individual is more difficult to reach you may want to segment by urban versus rural, train commuters, people who read Wall Street Journal, etc.

Access (or lack of access) to competitive offeringsDue to high investment capital requirements or timing of market entry you may be able to capture a significant market share in a specific geographical area. Examples might be a trash service, emergency medical support, etc.

Need for specific informationBased on features or content of your offering you can target a market segment. A product might be books on how to start a business or a service might be seminars on how to quit smoking.

Need for customizationProduct/service examples are home decoration, fashion wear, personal portraits, etc.

Need for quality, durability, etc.Product examples are mountain climbing gear, carpenter's tools, etc.

Degree of a product/service ingredientSegmentation based on prospect preferences is common. An example is dark chocolate for some tastes, light chocolate for others.

Purchase decision influencersOnce you have isolated a specific segment of the market on which to focus, then you can consider more subtle influences on the purchase decision. Some of these are:

Preference for channel of distributionMany prospects prefer to buy through a specific distributor or wholesaler. For individuals this may be due to subtle, as well as, economic reasons. For example, an individual prospect may immediately think of Wal-Mart or Home Depot when considering an offering like yours. A business often has a preference so they can have a single communication point for all purchases. This also often results in lower purchase prices.

Number of decision makersWhen selling to consumers or businesses, the more individuals or groups involved in the purchase decision, the more difficult the sale. Marketing costs for selling bread can stay low because one person normally makes the purchase decision. Car purchases are more complex because the purchase decision normally involves a husband and wife. Business sales to committees often require months to achieve a decision.

Financial strength of the prospectLess affluent prospects may desire time payments versus a cash purchase and Chevrolets instead of Cadillacs.

Quantity/volume requirementsRestaurants will want large jars of pickles while individuals want small jars. Businesses use large amounts of electricity at predictable times.

Ability to use the offeringTrying to sell to a prospect who lacks either the knowledge or resources to properly benefit from your offering will result in a 'no sale' situation or an unhappy customer. The prospect should have knowledge and resources such as time, equipment, facilities, personnel and complementary products/services.

Commitment requiredIf the offering requires a high commitment in terms of time, resources or money by the customer then the target should be prospects who 'really need' the offering rather than prospects who get some, but not a lot, of benefits.

Brand awareness/users

Examples are prospects who ask for IBM compatible PC's or Pitney Bowes mailing machines or Winnebago R.V.s

Attitude toward a personality or enterpriseReputation helps sell AT&T long distance service, IBM computers, Michael Jordan tennis shoes, etc.

Attitude toward price versus valueFor example, purchasers of collectors items aren't price sensitive while purchasers of commodity items are price sensitive.

Experience with other products/services your enterprise has offeredYou are looking for a reaction like "I liked your first product so I'll try your second."

Prospect biasExamples are, 'Buy USA', I want a car with a 'solid' feel, fast cars, sweet wines,large print playing cards, etc.

Affiliation with other organizationsSuch as the U.S. Chamber of Commerce, AMA, IEEE, doctors, attorneys, pastors, franchisors, entrepreneurs, etc.

After sale support expectationsIt is often beneficial to target prospects who have enough expertise that they will require a minimum of after sale support.

Seller Characteristics that can Influence Purchase Decision:

Another form of influence is how the prospect perceives your offering and/or enterprise. If you can determine the characteristics your prospects most value in an enterprise they purchase from, you can identify those your organization possesses and promote them to the prospect.

Unique employee skills, knowledgeExtensive experience with a specific market segment or field of scientific inquiry can be a powerful promotional tool. For example if an enterprise could sat, "Our scientists knows more about corn silk genetic structures than anyone in the world" they would have a strong sales statement.

Special relationships with distribution channelsProduct or service accessibility is a critical factor in sales success. If an enterprise could say, "Due to a unique relationship, the XYZ video stores give us more shelf space than any competitor" prospects will likely respond positively.

Customer service capabilitiesProspects like to know that they can depend on post sale support from the product or service provider. A statement like, "We have more

service outlets in New Hampshire than any competitor" will help secure sales.

Unique product formsCredible uniqueness such as, "Our product is the only one that offers dynamic digi-whirling" is appealing to the market.

Manufacturing expertiseThe market is always interested in purchasing from the "best". If an enterprise can confidently state, "We are the only enterprise that can manufacture molecular engineered widgets", they have created an image of being the "best".

LongevityReliability is important. A statement like, "We have been in business for 50 years, so you can count on us to be there when you need us" is usually a strong selling point.

Purchase Decision Makers

Finally, a point to consider is, given the characteristics of your offering, what type of decision maker will most likely be interested in purchasing from you. It may be beneficial to rank your prospects based on the following classifications. While you may not be able to make this classification of the prospect prior to the first contact, if your sales personnel are sensitive to these characteristics it can strongly influence your sales strategy.

Ultra Conservative - don't rock the boat, whatever they purchase must be consistent with their current way of doing things.

They are most likely interested in products/services that are improvements to existing offerings rather than something new.

Once established as a customer they are seldom inclined to review alternatives.

Very negative to technically complex offerings or offerings requiring extensive user education.

Cost effective offerings are only of interest if they don't disturb the status quo.

They are likely to react positively to any volume purchasing opportunities.

Conservatives - are willing to change, but only in small increments and only in a very cost effective manner.

Will consider new products/services but only if related concept has been proven to be effective. More likely to purchase improvements to existing offerings.

Will probably want to review competitive offerings, but will gravitate to best known offering with lowest risk decision.

Negative to neutral when considering technically complex offerings or offerings requiring extensive user education.

Strongly influenced by cost effective offerings and/or 'best price' opportunities

Liberals - regularly looking for new solutions, willing to make change (even major change) if the benefit can be shown.

Will usually consider new products/services even if the related concept has not yet been proven to be effective, but only if the potential benefits can be specified and understood.

Wants offerings that make effective use of technology, but is not interested in offerings just because they use a certain technology.

Will always want to review competitive offerings, but will usually choose the one offering the greatest benefit, even if there is some risk involved.

Neutral to positive when considering technically complex offerings or offerings requiring extensive user education.

Usually concerned with keeping employees informed and educated, so will often consider educational offerings.

Strongly influenced by offerings that most closely deliver the 'end results' desired, even if they are not the most cost effective.

Often are on social trend bandwagons so react positively to offerings that address these needs.

Technical Liberals - enamored with the benefits provided by high tech solutions and any purchase decision will be biased by the technical content of the offering.

Usually consider new products/services even if the related concept has not yet been proven to be effective.

Often consider just because they use a certain technology. Will always want to review competitive offerings, but will usually

choose the one offering the most hi-tech features, even if there is some risk involved.

Consider themselves technically competent and will expect leading edge use of technology.

Positive to fanatic when considering technically complex offerings even when requiring extensive user education.

Conversion costs usually not a major concern if technical benefits are there.

Not particularly concerned with keeping employees informed and educated, so educational offerings are not of great interest.

Strongly influenced by offerings that most closely deliver the 'end results' desired, even if they are not the most cost effective.

Self Helpers - consistently defines/designs solutions to their problems, likes to acquire tools that help in the innovation process.

Will usually consider new products/services, but the related concept must have been proven to be effective.

Often consider just because they use a certain technology that is relevant to the development program they have underway.

Will always want to review competitive offerings, but will usually choose the one offering the most effective 'do it yourself' features.

Usually consider themselves technically competent and will expect very effective use of proven technology.

Not especially inclined toward technically complex offerings, would rather have user friendly, but thought provoking, offerings.

Conversion costs usually not a major concern if offering promises potential for innovation.

Usually concerned with keeping employees informed and educated, so educational offerings are of interest.

SWOT Analysis of Cadburys

STRENGTH

1. Cadbury is a company, which is reputed internationally as the topmost chocolate provider in the world.

2. The brand is well known to people & they can easily identify it from others.

3. Cadbury the world leaders in chocolate, is a well-known force in marketing and distribution.

4. Users have a positive perception about the qualities of the brand.5. Cadbury main strength is Dairy milk. Dairy milk is the most

consumed chocolate in India.6. By using popular models like Cyrus Brocha, Preety Zinta and others

Cadburys has managed to portray a young and sporty image, which has resulted in converting buyers of other brands to become its staunch loyalists.

7. Cadbury has well adjusted itself to Indian custom.8. It has properly repositioned itself in India whenever required i.e. from

children to adults, togetherness bar to energizing bar for young ones etc.

WEAKNESS

1. There is lack of penetration in the rural market where people tend to dismiss it as a high end product. It is mainly found in urban and semi-urban areas.

2. It has been relatively high priced brand, which is turning the price conscious customer away.

3. People avoid having their chocolate thinking about the egg ingredients.

OPPORTUNITIES1. The chocolate market has seen one of the greatest increases in the

recent times (almost @ 30%)2. There is a lot of potential for growth and a huge population who do not

eat chocolates even today that can be converted as new users.

THREATS1. There exists no brand loyalty in the chocolate market and consumers

frequently shift their brands.2. New brands are coming and existing brands are introducing new variants

to add up to an already overcrowded market.

CADBURY ACQUIRED BY KRAFTBritish candy maker Cadbury PLC on Tuesday accepted and recommended to shareholders Kraft's improved takeover offer worth $18.9 billion, potentially ending a months-long corporate battle to create the world's largest maker of chocolate and sweets.

The US food conglomerate said the board of Cadbury, maker of Creme Eggs and Dentyne gum, had unanimously endorsed the offer worth 840 pence per share, or 11.9 billion pounds in total.

The revised bid is for 500 pence cash and 0.1874 new Kraft shares for each Cadbury share, still somewhat less than some analysts believed the company is worth.

Kraft Foods Inc.'s previous offer of 10.5 billion pounds ($17.1 billion) valued Cadbury at about 770 pence, but was dismissed by the British company's management as "derisory."

The combined companies would be the world leader in chocolate and sweets, Kraft said, and No. 2 globally in the high-growth gum market.

"We have great respect for Cadbury's brands, heritage and people. We believe they will thrive as part of Kraft Foods," said Kraft's CEO Irene Rosenfield.

"This recommended offer represents a compelling opportunity for Cadbury shareholders, providing both immediate value certainty and upside potential in the combined company."

Cadbury Chairman Roger Carr, who had led a spirited defense against Kraft's previous offer, said he believed the deal "represents good value for Cadbury shareholders."

Kraft still has to persuade a majority of Cadbury shareholders to accept the deal, and the door remains open until Saturday for The Hershey Co. to jump in with a rival bid.

Cadbury shares were up 3.3 percent at 834 pence following the announcement.

Kraft predicted pretax cost savings of at least $675 million a year once the combination has been working for three years. Tuesday was the deadline for Kraft to raise its offer. Cadbury shares moved above 800 pence on Monday, indicating the market was looking for Kraft to jump to that level or higher.

The British company had fought hard against Kraft's initial offer announced in December, rejecting it as a "derisory" bid from an unfocused, underperforming conglomerate.

The agreed price is 13 times Cadbury's earnings before interest, taxes, depreciation and amortization; Cadbury had argued that similar recent takeovers in the sector had been for 14 times EBITDA or more.

Kraft may still have a battle winning endorsement from Cadbury shareholders, and The Hershey Co. has until Saturday to decide whether it wants to make a rival bid.

Feb. 2 is the deadline for Kraft to win acceptance from holders of a majority of Cadbury shares.

David Cumming, head of U.K. equities at Cadbury shareholder Standard Life, had said Monday that Kraft needed to aim above 900 pence to secure support from long-term shareholders. But on Tuesday, he signaled the fight was over. "I probably won't go against the view of Cadbury's management," he told the ‘BBC’.

Kraft, based in Northfield, Illinois, had raised the cash portion of its offer earlier this month after selling its North America pizza business to Nestle for $3.7 billion.

The report of a deal drew a sharp response from Felicity Loudon, a great granddaughter of Cadbury's founder Egbert Cadbury.

HERSHEYS

Hershey Foods Corporation is the largest U.S. producer of chocolate and non-chocolate confectionery products,the company markets more than 50 brands worldwide. Milton Hershey established the Hershey Chocolate Company around 1900, after sellings caramel-manufacturing business ecompany was located in the rich Pennsylvania countryside where there was a plentiful supply of freshmilk. After much, developed his own method for making milk chocolate. The experimenting, Hershey ,Milk Chocolate bar first appeared in 1894, and one of Hershey Almond Bar and Hershey I the most popular items,Hersheys kisses, was introduced in 1907.Hersheys business prospered during World Warn. The firm produced a specially formulated chocolatebar for theU.S. government that would not melt in a soldier, pocket,but would sustain mat soldier if no other food available.About 500,000 bars were produced each hour, twenty-four hours a day at the Hershey factory. The Hershey Company experienced healthy growth at the close of World War D (Broekel 1982).However, after World War D, under the conservative leadership of PercyAlexander Staples, the Hershey Corporation had been through years of stagnation. The company missed ideal opportunities to expand into European markets, lost its market leadership position to Mars and had difficulties sustaining new product entries

PRODUCTS OFFERED BY HERSHEYS Chocolates

1. Hershey’s2. Reese;s3. Milk Dud4. Hershey’s Kisses

Premium Chocolates

1. Cacao Reserve

2. Joseph Schmidt

3. Dagoba

Refreshment Products

1. Ice Breakers

2. Breath Savers

3. Bubble Yum

SWOT ANALYSIS OF HERSHEY’S

STRENGTH

Marketing Resource:. Hershey is strongly associated with an image of highquality and a broad and deep product line. Hershey manages more than fifty brand in the domestic market andhas built up a number of leading brand names. Among the top ten brands ranked by dollar sales in 1998, five of them belong to Hershey.These leading brand names also create opportunities for Hershey's product Une extension, and in some cases, royalties for its use on productsmade by others. Hershey licensed its stable of well-know brand names, including Hersheys and Reese's, to other companies for use on products ranging from cereals to icecream

Human Resource Management: Hershey has a strict standard to measureperformance and an improved compensation program. Hersheys management team benchmarks are Earning Per Share, Free Cash Flow, and Economic Value Added. Its managers' compensations are tied to these benchmarks. In addition, Hershey broadened its employee compensation program in 1996. The program was changed from Key Employee Incentive Package to HSY growth, under which Hershey granted its eligible employees one time 100 stock options and made its employees become owners for the first time. This partly explained the increase in Hershey's sale, In their annual report of 1997, Hershey's CEO attributed the sales growth to employees' effort. Hershey's employees have good morale in terms ofimproving Hersheys product quality and lowering cost.

Innovation. Hershey dedicates itself to expanding market share in the mature North American markets by introducing new brands. Hershey had one of the best innovation records with three successful introductions in the United States and Canada during the 1980s: Skor (1883), BarNone (1987), and Symphony (1989) (Yip, 1991).Hersheys managers proudly assert that they have the industry's largest inventory of new products.In 1996, Hersheys successful launch of TasteTations brought a 65% retail saleincrease for this product. In addition, Hershey also keeps innovating in merchandising, which made its retail grow at 5.6% greater than the category growth. Hershey advertises its products by sponsoring entertainment activities, especially movies and sports. In 1997, Hershey sponsored Jurassic Park and increased its seasonal candy sales.

Financial Resources.: Hershey Foods Corporation in general has strong financial performance. Its profit margins ranged between 6.8% and 7.7% from 1996 to 1998, slightly above the industry average of 7.0%. The corporation's return-on-assets ratios increased from 8.6% in 1996 to 10.0%

in 1998. Its total asset turnover ratios also increased from 1.25 to 1.3 during the same period, higher than the industry average 1.10. Its return-o„-equity ratios also increased and stood well above the industry average of 13.0%. One major concern about Hershey's financial performance is the corporation's use of debt. Hershey's equity multipliers in the period of 1996-1998 were 2.74,3.86, and 3.26 respectively, which all were higher than the industry average of 1.9. These multipliers indicate that Hershey used a larger percentage of debt to finance its operations.

WEAKNESS

Hershey’s most serious weakness is its international expansion strategy.Historically, most of Hersheys acquisitions occurred in the domestic market, while the majority of its divestiture is in international markets. Mars beat Hershey almost in everyone of Hersheys international markets. Hershey has tried to sell its products in Mexico for decades; Mars's market share surpassed Hershey in the very first year it entered the Mexican market. In Japan, Mars also surpassed Hershey. Although Hershey exports to 90 countries, exports accounted for only less than 4% of its 1997 total sales. Inaddition, Hershey is the only confectionery giant that has no manufacturing factories outside the U.S .Management Leadership: Hershey’s management lacks an international mindset.The company has little knowledge of world markets (Brenner, 1999). Its Vice President, appointed in 1993 and in charge of its international operations, does not speak a second language. "How can they really have hopes for global expansion when he can't even communicate?" questioned Jeffery, a current consultant in the industry. In 1998, Hersheys experienced big change in its management. Recently, eight top managers were removed. It will take some time for the corporation to adjust to changes and react to markets.

Production Efficiency: Hershey's packaging and handling distribution costs are quite high. According to Hersheys Annual report of 1998, there are some higher packaging, handling and distribution costs associated with their thematic merchandising strategy. The higher distribution costs related to the diversity of Hersheys product line continued to exert pressure on Hersheys gross margin. In addition, Hersheys manufacturing capacity is falling behind market demand for its new products. Reese Sticks, introduced in 1998, has been a very successful market for Hershey. However, Hershey does not have enough manufacturing capacity to produce allthe usual package types. Furthermore, Hershey's recently emerged technology-related problems delayed the corporation's shipments and caused its earning to drop by 19%. One major reason for this delay is Hershey's lack of adequate facilities.

OPPORTUNITIES1. Innovations2. Emergence of global markets3. Global competition4. Cancellation of sugar price support

THREATS

1. Change in consumer lifestyle2. High substitutes3. Government regulation

Bakery & Confectionery

Bakery products are an item of mass consumption in view of its low price and high nutrient value. With rapid growth and changing eating habits of people, bakery products have gained popularity among masses. The bakery products which include bread and biscuit form the major baked foods accounting for over 82% of total bakery products produced in the country. The bakery industry in India enjoys a comparative advantage in manufacturing with abundant supply of the primary ingredients required by the industry.Major types of biscuit popular in Indian market are Glucose, Marie, Cream, Crackers ,Digestive ,Cookies and Milk .

The Indian confectionery market is estimately valued at approximately Rs 50 billion. The Indian confectionery market includes sugar boiled confectionery, hard boiled candies, toffees and other sugar-based candies. Sugar boiled confectionery had penetrated an estimated 15% of the households only, suggesting a large potential for growth. Substitution products, chewing and bubble gums are supported by MNCs major like Cadbury India) and Nestle and high powered advertising. Placed at about Rs 3,250 million, the gum and mint market is growing at a rate 10 to 15% annually.

The organized market is dominated by Parry and Nutrine, Perfetti India (Alpenliebe), Warner Lambert; General de Confiteria has made their presence felt in this sector.A large part of the confectionery industry in India comprise of the local subsidiaries of global confectionery majors like Perfetti, Lotte, Wrigley's and Cadbury.

The chocolate and confectionery category, the second largest packaged food segment, has been growing steadily in all regions over the last few years.

Globally, chocolate confectionery is the largest sector in terms of value, accounting for almost 60 per cent of total sales.

The Indian confectionery market is estimately valued at approximately Rs 50 billion. The Indian confectionery market includes sugar boiled confectionery, hard boiled candies, toffees and other sugar-based candies. Sugar boiled confectionery had penetrated an estimated 15% of the households only, suggesting a large potential for growth. Substitution products, chewing and bubble gums are supported by MNCs major like Cadbury India) and Nestle and high powered advertising. Placed at about Rs 3,250 million, the gum and mint market is growing at a rate 10 to 15% annually.

The organized market is dominated by Parry and Nutrine, Perfetti India (Alpenliebe), Warner Lambert; General de Confiteria has made their presence felt in this sector.A large part of the confectionery industry in India comprise of the local subsidiaries of global confectionery majors like Perfetti, Lotte, Wrigley's and Cadbury.

The chocolate and confectionery category, the second largest packaged food segment, has been growing steadily in all regions over the last few years. Globally, chocolate confectionery is the largest sector in terms of value, accounting for almost 60 per cent of total sales

The Indian confectionery market is estimately valued at approximately Rs 50 billion. The Indian confectionery market includes sugar boiled confectionery, hard boiled candies, toffees and other sugar-based candies. Sugar boiled confectionery had penetrated an estimated 15% of the households only, suggesting a large potential for growth. Substitution products, chewing and bubble gums are supported by MNCs major like Cadbury India) and Nestle and high powered advertising. Placed at about Rs 3,250 million, the gum and mint market is growing at a rate 10 to 15% annually.

The organized market is dominated by Parry and Nutrine, Perfetti India (Alpenliebe), Warner Lambert; General de Confiteria has made their presence felt in this sector.A large part of the confectionery industry in India comprise of the local subsidiaries of global confectionery majors like Perfetti, Lotte, Wrigley's and Cadbury.

The chocolate and confectionery category, the second largest packaged food segment, has been growing steadily in all regions over the last few years. Globally, chocolate confectionery is the largest sector in terms of value, accounting for almost 60 per cent of total sales

What is diffrence between Candy, Toffee & Related Items?

Candy- Candy, specifically sugar candy, is a confection made from a concentrated solution of sugar in water, to which flavorings and colorants are added. Candies come in numerous colors and varieties and have a long history in popular culture.

The Middle English word "candy" began to be used in the late 13th century, coming into English from the Old French çucre candi, derived in turn from Arabic qandi and Persian qand, "cane sugar."[1] In North America, candy is a broad category that includes candy bars, chocolates, licorice, sour candies, salty candies, tart candies,hard candies, taffies, gumdrops, marshmallows, and more.[citation needed] Vegetables, fruit, or nuts which have been glazed and coated with sugar are said to be candied.

Outside North America, the generic English-language name for candy is sweets or confectionery (UK, Ireland, Australia, New Zealand, South Africa and other Commonwealth countries). In Australia and New Zealand sweets are, in normal usage, further categorized as either chocolate or lollies (for all other non-chocolate candies).

In North America, the UK, and Australia, the word lollipop refers specifically to sugar candy with flavoring on a stick. While not used in the generic sense of North America, the term candy is used in the UK for specific types of foods such as candy floss (cotton candy in North America and fairy floss in Australia), and certain other sugar based products such as candied fruit.

A popular candy in Latin America is the so-called pirulín (also known as pirulí), which is a multicolor, conic-shaped hard candy of about 10 to 15 cm long, with a sharp conical or pyramidal point, with a stick in the base, and wrapped in cellophane.

Toffee - Toffee is a confection made by caramelizing sugar or molasses (creatinginverted sugar) along with butter, and occasionally flour. The mixture is heated until its temperature reaches the hard crack stage of 300 to 310 °F (149 to 154 °C). While being prepared, toffee is sometimes mixed with nuts or raisins.

The process of making toffee involves boiling the ingredients until the mix is stiff enough to be pulled into a shape which holds and has a glossy surface. The resulting mixture will typically be poured into a shallow tray and allowed to cool to form a sheet. Different mixes, processes, and (most importantly) temperatures of toffee making will result in different textures and hardnesses, from soft and often sticky to a hard brittle material.

A popular variant in the US is English toffee, which is a very buttery toffee often made with almonds. It is available in both chewy and hard versions. Heath bars are a type of candy made with an English toffee core. Although named English toffee it bears little resemblance to the wide range of confectionery known as toffee currently available in the UK.

Another variant is Cinder toffee, also called honeycomb or sponge toffee, which is an aerated version with bubbles introduced by adding baking soda and vinegar while mixing. These react to form carbon dioxide, which is trapped in the highly viscous mixture. In the UK the most well known honeycomb candy is the Crunchie bar. In New Zealand this is called hokey pokey.

A particular application of toffee is in toffee apples, which are apples on sticks which are coated with toffee. Toffee apples are similar to taffy apples and caramel apples(both names for apples which are covered in caramel).

In the UK, toffee apples, sometimes called candy apples, are coated with brittle candy similar to boiled sweets.

Toffee used in confectionery has many different forms and is mixed with many different ingredients. Rum & Butter Toffee, Chocolate Covered, Vanilla & Chocolate, Rum & Raisin, Honeycomb.

List of candy manufacturers

1. Perfetti Van Melle

2. Lotte

3. Wrigley’s

4. Cadbury

PERFETTI VAN MELLE

Perfetti Van Melle S.p.A. is the world's sixth-largest candy and confectionery producer and number two in Europe. Representing the combination of Italy's Perfetti with the Netherlands' Van Melle, Perfetti Van Melle produces and markets a host of top-selling candy brands, including Mentos, Fruittella, Brooklyn, Alpenlieve, Golia, and Frisk. Perfetti Van Melle has a worldwide presence, with factories in Italy, the Netherlands, Germany, Spain, and elsewhere in Europe, as well as manufacturing sites in the United States,

Brazil, Turkey, India, China, Indonesia, and Vietnam. The company has also announced its intention to begin manufacturing in Russia in 2005. Sales of the privately held company's products reach more than 130 countries. Perfetti Van Melle operates dual headquarters in Lainate, Italy, and Breda, the Netherlands. The company's sales were estimated to top EUR 1.3 billion ($1.6 billion) in the mid-2000s.

Van Melle's Origins in the 19th Century

The merger between Italy's Perfetti and Van Melle of the Netherlands in 2001

created one of the world's top confectionery companies, with a rank of

number two in Europe and a global ranking of number six. The merger

cemented the friendly relationship that existed between the companies for

some two decades and had led Perfetti to become a major shareholder in

Van Melle by the early 1990s.

Van Melle was the older of the two companies, tracing its origins to a bakery

founded by Izaak van Melle in Breskens, the Netherlands, in 1841. The

bakery was taken over by one of van Melle's sons, Abraham van Melle, in

1882. It was under this generation that the family made its first entry into

the confectionery business. One of the bakeries employees came from

Belgium and knew how to prepare sugar in order to make candy. Van Melle

decided to begin cooking up candies besides its usual bakery goods. The

shop's "suikerballetjes" (sugar balls) quickly became a popular local favorite.

Production remained on a small, homemade scale, however.

Abraham van Melle's son Izaak joined the family business by the turn of the

20th century. Recognizing the popularity of the bakery's candies, the

younger Van Melle decided to launch large-scale production of the

confectionery and invested in machinery and equipment to establish a full-

fledged candy factory in 1900. Izaak van Melle also continued to seek to

improve the company's products, establishing high-quality standards and

expanding and modernizing its production facilities.

The company also rapidly turned to the international market for sales. By the

1920s, the company's products had found their way across the world,

reaching the Dutch Indies, South Africa, Morocco, Tunisia, and Algeria, many

Asian markets, and, closer to home, markets in Europe, such as Greece.

Izaak van Melle himself traveled extensively, seeking out new clients and

markets.

Van Melle's many travels had led him to discover many new candy and

confectionery varieties, which he brought back to the company. In this way,

in 1926, the company launched production of toffee candies, an English

favorite. Van Melle soon made the recipe its own, and, working in its own

test kitchen, extended its range of toffee to include a variety of flavors,

including licorice. The company's recipe proved so successful that Van Melle

toffees became popular even in the United Kingdom.

A trip to Poland in the early 1930s gave the company two new recipes. The

first was for a soft caramel-like candy containing real fruit flavors. The

second was a candy-coated peppermint-flavored caramel. These candies

later became known as Fruittella and Mentos, respectively, and helped

launch Van Melle into the ranks of the world's leading confectionery

companies.

By the 1930s, however, Van Melle was already a prominent confectioner, and

by 1935 the company had even purchased its own airplane, a rarity at the

time. However, the German occupation of the Netherlands during World War

II brought hard times to the company. Wartime restrictions on sugar

consumption severely cut into production. By the end of the war, bombing

raids had destroyed the Van Melle factory.

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

SEGMENTATION, TARGETING, POSITIONING OF PERFETTI VAN MELLESegmentation

• The marketing people identify different ways to segment the market & develop profiles of the resulting market segments.

• Products which Perfetti offers in the market are very universal on the basis of consumption.

In PVM there are no issues regarding Geographic or Demographic segmentations. But taking in consideration some important Psychological bases of segmentation Perfetti have modified many existing & also developed new products.

Targeting

Market segmentation reveals the firms market segment opportunities. The firm now has to evaluate the various segments and decide how many & which ones to Target. This is the place where company uses its Targeting strategies.

Perfetti is the producer of various kinds & types of gums i.e. chewing gum, bubble gum & funtional gum which ultimately targets the unproductive consumers i.e. consumers from the age group from 5 to16

Where as now-a-days almost everyone likes to consume such products and therefore we can call it as an universal targeting strategy.

However the concentrated marketing segment which will be the young population which includes School-kids, Collegians, Bachelors, etc.

According to the statistics the company has…

5,000 distributors service.

700,000 outlets across the country.

40% of the volume from towns.

And now eyeing new retail options like juice

corners, fruit stores & vegetable

vendors.

Advertising Strategies

• Authentic product position strategy

• Smart buying of TV time helps to get better deals without compromising viewership.

• Advertises on family channels specialy cartoon to reach out wider audience.

Price strategy

• “Our growth is real it has come from volume & not price hikes”

- Milind Pingle(Sales Head PVM India)

• In the past 12 years PVM hasn’t raised its price even once.

• The entire confectionary industry is stuck at low price 25 ps, 50ps & Re 1 due to intense competition.

• In the recent scenario climb in the price of raw material and petroleum has to be absorbed by the manufacturer.

Distribution strategy

• PVMI has created a Multi-Tiered Distribution system.

• Product range is divided into 3 categories, which in turn have different distributors.

• A large chunk of confectionery retail trade is made up of retailers like paanwallahs.

• According to PVMI strategy, when these retailers are visited thrice a week,they tend to replenish supplies & pick up new variants.

The Promotion Mix

• The Promotion Mix consists of “ the specific blend of advertising, sales promotion, public relations, personal & direct marketing tools that a company uses to persue its advertising & marketing objectives”.

• Promotion mix is also called as marketing communications mix and constitutes one of the 4ps of marketing mix ,i.e., Promotion, the other three being Product, Price & Place

• Promotion mix tools used

• Advertising :- It includes any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor such as Newspaper, Radio, Banners Haordings etc.

• Sales promotion :- Short –term incentives to promote sales like displays, samples, exhibitions, coupons, contests etc., constitutes sales promotions.

• Public relations :- It includes building good relations with the public by obtaining favourable publicity, building good corporate image & handling or avoiding unfavourable publicity, rumours and events.

• Personal selling :- It includes direct personal presentation by company sales force for sales and building customer relationship.

• Publicity :- it includes non-personal promotion of demand for products by obtaining publicity through news in media like TV, radio, newspaper & magazines.

ANALYSIS

PVM India has created a multi-tiered distribution system.

It emphasized on product portfolio, distribution network, brand building & product mix.

Product range is divided into 2 categories, which in turn have different distributors.

Initially company offer a pack free of cost for promotion and increase selling.

Its more concreted in advertisement to create brand value in mind of customer.

Its took sponsorship in cricket match also for more advertisement.

PVM segmented its product according to psychological and geographical

Its targeted the people , that child and youth up to 5-24 year to sell their product.

Its manufactured the good which mostly like to child as sweet and more chocolate and chewing gum for youth.

The margins for distributors(p2) & retailers were not increased due to less demand in the market.

It spend more on promotions & advertising.

The company gave free pack offer for every pack sold to have hold of their distributors & retailers.

The Candy War of 2009

There are only a few major confectioners, six to be exact.  And currently there’s a four-on-one cage match underway to see who can come out on top of the heap.  The world’s major players in candy are Mars/Wrigley, Cadbury, Nestle, Kraft, Hershey and Ferrero.  Mars bought Wrigley last year for $23 billion securing one of the largest brands in the business and the number one spot in the industry.  This year, the rest of the industry has set it’s sights on Cadbury.  With Kraft throwing the first blow, Nestle, Hershey and Ferrero are now expressing interest in acquiring the historic British confectioner.  The reason it’s turned into a war is because Cadbury is well aware of it’s worth and will not go easily.   

According to Mark Scott’s article for BusinessWeek, the candy industry is consolidating and there are few places left to target for growth.  Miller Zell conducted a focus group earlier this year with shoppers aged 16-35 where we asked about their behavior when it comes to making candy purchases. Most of the respondents, event the teen group, admitted that candy purchases are typically relegated to holiday and gum purchases.  Most indicated that health was a consideration in their candy purchases and while most candy is viewed as empty calories, gum is a necessary oral hygiene accessory. So where does this leave these confectioners?  In emerging markets like India; which brought Cadbury a 16.1% revenue increase last year.  Scott reports that emerging markets have an “insatiable appetite for candy [which] is fueling double-digit market growth.”  No wonder Hershey and Kraft want in on that action.  The predominance of their candy sales are domestic. 

The western hemisphere only saw a 5.2% increase in candy sales last year. Kraft actually reported a 5.7% decline.   

Scott goes on to detail why this fight for Cadbury is important to the other companies and the candy business overall.  However, in the grand scheme of things, it’s interesting to watch the consolidation of this particular category. One has to wonder, if over time it will continue to significantly diminish in size, once the rest of the world adopts the western way and decides that the joys of candy aren’t worth the calories or cavities.  Do you think that the candy category will eventually go away as a major business and be reduced to a segment within a CPG?  Can you think of any other products categories where major players dissolved to segments of larger diversified consumer companies?