Wednesday, December 26, 2007

Chocolate Market in India

Facts & Figures
1. Chocolate market is estimated to be around 1500 crores (ACNielson) growing at 18-20% per annum
2. Cadbury is the market leader with 72% market share
3. The per capita consumption of chocolate in India is 300 gram compared with 1.9 kilograms in developed markets such as the United Kingdom
4. Over 70 per cent of the consumption takes place in the urban markets
5. Margins in the chocolate industry range between 10 and 20 per cent, depending on the price point at which the product is placed
6. Chocolate sales have risen by 15% in 2007 to reach 36000 tonnes according to one estimate. Another estimate puts the figure at 25000 tonnes
7. 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 confectionery
9. Entire Celebrations range marketshare is 6.5%
10. The global chocolate market is worth $75 billion annually

1. The chocolate market in India has only three big players, Cadbury, Nestle and Amul
2. New brands such as Sweet World, Candico and Chocolatiers are present in several malls
3. The largest target segment for Cadbury is youth
4. 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 own
5. 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, Perk
2. Nestle - Bar One, Kit Kat, Milkybar, Munch, Nestle
3. Amul - Amul (Chocozoo, Chocomines)
4. Dairy Milk is the market leader
5. 5 Star (heritage brand which came to India in 1969) has a marketshare of over 14%

Consumer Trends
1. Mithai- the traditional Indian sweats is getting substituted by chocolates among upwardly mobile Indians. Instead of buying sweats on Raksha Bandhan, sisters prefer offering chocolates to their brothers. This is the reason for sudden spurt in advertisement between July & Sep by most of the companies
2. The range and variety of chocolates available in malls seems to be growing day by day, which leads to lot of impulse sales for chocolate companies
3. Chocolates which use to be unaffordable, is now considered mid-priced. Convenience over Mithai in terms of packaging and shelf life in making both middle class and rich Indians opt for chocolates
4. Designer chocolates have become status symbols. They are linked to one’s aspiration and lifestyle and malls are perfect points of sale as people usually are happy and gay at these destinations
5. Cadbury initial communication for Celebrations was concentrated on occasions like Diwali and Rakshabandhan. Over the last seven to eight years, the brand emerged as a good gift proposition for occasions and enabled people to come closer. Research done by Cadbury suggested that they should extend the plank of occasion-based gifting to social gifting i.e. all-year-round gifting options
6. Consumers can choose from wide range of chocolates, which initially was limited to Milk chocolates like DairyMilk and MilkyBar. In past few years we have seen so many SKUs with almonds, raisins and all sort of nuts. And how can we forget latest 5 star crunchy and Ulta Perk, which has opened new windows for consumers
7. In past, consumers had negligible inclination for dark chocolates. But now we have seen a change in the Indian palate, which is increasing the base of this sub-segment

Advertisement Trends (AdEx - division of TAM Media Research)
1. Chocolate advertising rose by 30 per cent during January-November 2007 compared to January-November 2006
2. Maximum chocolate advertising was during Raksha Bandhan across 2005 and 2006 and January-November 2007
3. As expected chocolate advertising skewed towards kids channels and regional GEC took the second position
4. Cadbury India Ltd rules chocolate advertising on television
5. 17 per cent more advertising during third quarter 2007 (Raksha Bandhan festival) compared to first quarter 2007
6. Regional GEC took the second place with a 21 per cent share ad volumes of chocolates, followed by Hindi movie with 13 per cent share during January-November 2007
7. Among regional GEC, maximum advertising of chocolates was on Malayalam and Bengali channels
8. Cadbury India Ltd was way ahead of its peers with 66 per cent share followed by Nestle India Ltd and Parle Products Pvt Ltd during January-November 2007
9. During January-November 2007 the number of new chocolate brands advertised decreased to seven from 12 during 2006
10. Nestle Munch Pop Chocolate led the chart of new chocolate brands advertised on television during January-November 2007

Some BTL Activities
1. Cadbury India has tied up with leading coffee chain Café Coffee Day for direct sampling of the product in top cities

External Environment
1. The prices of cocoa and milk, the chief ingredients used in chocolates, have gone up by 50 per cent, while the price of sugar, another important raw material, has come down. The overall input costs have gone up by 20 per cent. If the prices of these commodities keep increasing, companies will be forced to increase the prices. India imports most of its cocoa requirements. The prices of cocoa have risen globally due to unavailability of the commodity
2. US-based chocolate-maker Hersheys is mulling a foray into the Indian chocolate market through its joint venture with Godrej

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Friday, December 21, 2007

Shoe Polish market in India

Shoe polish Cherry Blossom was launched in the UK in 1906 by Chiswick Soap Company, a part of Reckitt & Coleman (now Reckitt Benckiser).Its one of the few brands which have survived with a leadership for 100 years.

Kiwi has a history that dates back from 1906 when William Ramsay developed an unusually fine boot polish. He put the Brand name as Kiwi since his wife is a native of Newzealand. The brand grew so big that in 1967, the products were used worldwide under the banner Kiwi nternational. In 1984, it became the part of Sara Lee Corporation. Kiwi was an active player in the shoe care market from 1994 onwards. The brand was owned by Sara Lee corporation. In India, Sara Lee started as a joint venture with TTK corporation. In 2002, it became an independent venture. Now SaraLee has tied up with Godrej to market its products.

Facts & Figures
1. Penetration of Shoe Polish is more than 30% in rural India
2. Cherry Blosson was 75 crore in 2006, 60-70% market share in Rs 110-120 crore shoe polish market
3. Shoe care market in India is small. This market was dominated by Cherry Blossom from Reckitt and Benckiser which earlier had a market share of 80%. Kiwi was the challenger brand and enjoys a market share of 24% in 2006 (ACNielsen) anfd Cherry's market share decline to around 60%
4. Wax polishes constitutes 70% of the market while liquid polish constitutes 20%

Consumer Insights
1. Shoe polishes are infrequently purchased products with very less involvement from the customer
2. Cherry Blossom had a generic brand status in the market
3. Today in this hectic rush , seldom do we get time to polish our shoes every day. Understanding this Consumer insight, Kiwi launched Express shoe polish which can be used to shine shoes when you are in a rush. These innovations surely helped the brand to create a market for itself

In order to displace the leader, Kiwi banked on Innovation strategy which the market leader failed to anticipate. Kiwi was the first one to bring International standard Liquid shoe polish in India .It also pioneered the Shoe shine sponge which was a blockbuster. Kiwi was also the first brand to launch Suede and Nubuck range.While Kiwi talked about quality shoe care, Cherry Blossom was stuck with Poor " Charlie Chaplin look alike " ads. Most of the new product launches of Kiwi was in line with the changing consumer preferences. When the consumers opted for semi casual Suede and nubuck shoes, Kiwi was quick to launch Shoe care products for that category.

Cherry Blossom has stuck to its old association with Charlie Chaplin. Chaplin theme has proved so intrinsic to Cherry Blossom brand recall that Reckitt brought it back out of hibernation a couple of years ago. There were some interesting commercials in 2006 to celerbrate 100 years of Cherry. The commercial begins with a silent movie-style text cards that say "100 years of making perfect gentlemen..." and "...inspire us to introduce new anti-ageing shoe polish".
The "movie" then begins with Chaplin and his arch-rival Fatty buying shoes.As he turns to go, Chaplin picks up a tin of Cherry Blossom shoe polish from the display on the counter. Six months later: Chaplin returns to the store, buys a pair of shoelaces and tosses a coin to the shop-owner. Fatty's back, too. Only, he grabs the salesman and drags him over the counter to look at his completely worn-out shoes, while Chaplin's are still gleaming. Chaplin smiles nervously and leaves, and Fatty is befuddled. Fatty peers through a keyhole and sees Chaplin polishing his shoes with Cherry Blossom. Jealous, he throws the door open and rushes towards Chaplin, who moves aside and kicks him through the open window. The ad ends with a simpering Chaplin and product shots.

Their value proposition was very simple & straightforward: a shoe polish that prevents normal ageing symptoms like wrinkling, and makes shoes look new longer. Charlie Chaplin became almost synonymous with Cherry Blossom thanks to ad guru Alyque Padamsee, who helped create the first series of ads in the early 1980s. The focus then was on the "perfect gentleman" and the "perfect shine" on his shoes.

Stablization of Cherry Blossom
Between 2000 and 2003, the company stopped advertising completely to focus on sales promotion activities. "The competition was aggressive on such spends and we were simply trying to match it," recalls Vishal Gupta, marketing manager, Reckitt Benckiser. The results were disastrous: from over 73 per cent in 1999, Cherry Blossom's share of the polish market dropped to 61 per cent in end -2002. Euro RSCG was commissioned and with Illusion Films in tow, the first new Chaplin ad was beamed in March 2004. That showed Chaplin winning over Fatty, who was using another brand of shoe polish, to Cherry Blossom.

But Reckitt's focus was on offering customers newer ways to make their shoes sparkle: product innovations are on a high at the company, and the ads have to reflect that. After exploring various options, the Euro RSCG team finally hit on the "anti-ageing" theme, which dovetails neatly with the 100-year milestone ("still looks new") - as mentioned above. Speaking of the brief the company gave the agency, Singh says it was relatively simple. "This is a new product,
just announce it in the most interesting and effecting manner. And use Chaplin."

The Chaplin ads do seem to have added a sheen to Cherry Blossom's market share. It's climbed from 62 per cent in 2003 to close to 68 per cent at present (nowhere close to its earlier monopolistic position of 73 per cent, but still decent)

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Thursday, December 20, 2007

OTC Market in India: Marketing the FMCG Way

Over-the-counter (OTC) drugs are medicines that may be sold without a prescription, in contrast to prescription drugs. These items can be found on the shelves of grocery/ cosmetic stores and bought like any other packaged product in some countries or in others may be bought "over the counter" from the pharmacy, while prescription drugs are sold at a pharmacy counter.

In 2005 the Indian OTC segment was Rs 4500 crore it could be considered as Rest 17000 crores if cosmeceuticals & neutraceuticals are also included. The CAGR for Indian OTC markets is currently hovering between 12 and 15% and this is much faster than OTC market growth of most development countries.The OTC Market in India in 2007 will be around Rs. 6000 & 20000 crores. As per Euro RSCG India,OTC market is hovering around Rs. 2800 crores.
The global OTC market is projected to be USD 75 billion with a cumulative annual growth rate (CAGR) of 4.5%, which will make it 82 B$ in 2007.

There are different categories under OTC, out of which here is a list of categories which have spent maximum in brand building through on TV are as follows:

1. Rubs/ Balm - Moov, Iodex, Himani Fast Relief, Emami Mentho Plus, Amrujanjan Joint Ache Cream
2. Analgesic/ Cold Tablet - Dcold, Stopache, Crocin, Disprin
3. Digestives - Eno, Hajmola, Pudin Hara, Dabur Hingoli
4. Medicated Skin Treatment - Itch Guard, Krack, Ringguard, Clearasil
5. Cough Lozenges - Strepsils, Halls
6. Vitamin/ Tonic/ Heath Suppliments - Horlicks, Complan, Boost, Chawanprash - Dabur, Sona Chandi, Himalaya, Calcium Sandoz, Jeevanprash
7. Antiseptic Cream/ Liquids - Borosoft, Boroplus, Dettol

'Cipla I-Pill' a new brand was the most advertised brand on TV during January-September 2007.

12 per cent growth was observed in the advertising volumes of OTC (Over the Counter) sector on TV during January - September 2007 over January-September
2006 (AdEx - division of TAM Media Research). 'Rubs/Balms' had the largest share of overall OTC advertising pie.

Challenges for OTC Market & Inhibitions for branding

1. There is no clear definition of what constitutes an OTC pharma product. The healthcare segment in India has to mature enough for OTC expansion. The Drugs Technical Advisory Board has resisted approval of shift of molecules from prescription to OTC. So, that is the real challenge, not that OTC companies have not invested enough in brand building
2. There are a number of drugs such as Ranitidine (a digestive drug) which are sold in supermarkets in the West under various brand names. But the regulatory authority in India allows Ranitidine to be sold only through the prescription route
3. As per the regulations, one cannot sample OTC products directly to consumers. It has to be at the pharma shop level
4. The Indians always prefer home remedies to a prescription drug - Dadi Maa Recipes
5. Huge expense a brand may incur to advertise. The brands' turnovers are not large; many brands wonder whether spending 5-6 per cent of their turnover would give them enough returns
6. Invest in branding also has a fear of getting alienated by the community of doctors. Most brands consider the prescription route to be much safer
7. Consistent brand bulding is required over a period of time - Brands such as Coldarin have collapsed due to lack of consistency not only in spends but also positioning
The challenge for the pharma industry is to reach the fragmented target population of end-users while maintaining their traditional relationship with doctors.

Some players are already investing money in brand building. Benadryl, for instance, has spent Rs 7.5 crore on a brand turnover of Rs 35 crore, while Glycodin has spent Rs 4.5 crore on a brand turnover of Rs 18 crore.

Let me also enumerate some unconventional ways of marketing by OTC companies:

1. In-film & Event branding: Boots Piramal Healthcare started an initiative in Salaam Namaste where actress Preity Zinta attributes her clear voice to Strepsils. Second, for the Strepsils-Sa Re Ga Ma tie-up to release 12 music albums (twin CD packs) comprising retro originals. The Sa Re Ga Ma tie-up is a unique brand exercise to leverage the brand's identity of a clear voice by associating it with public figures such as Asha Bhosle and Kishore Kumar
2. Says Adarsh Somani, Director of Kopran which launched the Smyle Sore Throat Reliever in 2003, "The Reliever was not well received initially due to its gargle-and-gulp process. It took us some time to establish this product. We invested a lot in advertising and in building up the concept." A trend-setter in its ads constructed around Kaun Banega Crorepati, the Smyle campaign became the talk of ad circles. The advertisement presented a child actor answering a
question, "Which is the best cough syrup?" The question was asked by a voice resembling that of Amitabh Bachchan on KBC. The child's answer, "Smyle Sore Throat Reliever," wins him a crore of rupees. The ad helped make the product a national brand
3. FMCG major Procter and Gamble (P&G) India has emerged as a winner in the OTC category by implementing various promotion programmes for Vicks (Vaporub, cough drops and Vicks Action 500). Their Mass Consumer Contact programme was a first-of-its-kind initiative that not only displayed the product but also allowed consumers to experience its effect first hand at small towns and villages, stores and cinema halls. Recalls Rahul Malhotra, the company's Head of
Marketing, "Regulations do not permit marketers to sample allopathic drugs outside a drug store. In the early eighties our company hit upon a unique mass sampling idea. We released an ad in leading dailies which had a tear-off coupon at the bottom. Readers could exchange the coupon for two free Vicks Action 500 (VA500) caplets from the chemist store. This single initiative helped VA500 generate mass trials overnight."
4. P&G also conceptualised the House of Vicks, a counter display for chemists to store Vicks products so as to increase product visibility. Converting Vicks Inhalers into trinket key-chains proved a good campaign for the brand too
5. In 1999, Kopran had put up a 2 km-long banner starting from Nariman Point up to the Marine Drive Flyover in Mumbai. The publicity event, which was timed to coincide with the one-day cricket match nearby, gave the company an additional audience of 6,000 people. The event also received appropriate coverage in a few newspapers as Kopran had also provided TV screens on the pavement for cricket-lovers who could not get tickets into the stadium.
6. Then in 2003 Strepsils launched a Clear Speak column on the front page of The Indian Express. This 10 column centimetre (cc) fully-coloured column consisted of 5cc of Strepsils branding and another 5cc of an interesting comment from a commentator, cricketer or coach

This clearly shows that lot of branding efforts have been put in past despite lot of challenges in this category. Also with the fast moving life, people are shifting from Doctor prescription to OTC products (driven by marketing efforts); definately makes OTC a big segment in future.

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