Brand Management Assignment

Analysis of a Brand Evolution

3/7/2012 MICA - 18046 Prabhat Gupta

Perfetti Van Melle is a privately held Italian global manufacturer of confectionery and gum. It was formed in 2001 with the acquisition of Van Melle(also privately held) of the Netherlands, by the Italian group Perfetti of Italy and having its corporate headquarters in Lainate (Milan), Italy. Perfetti Van Melle bills itself as the third largest confectionery manufacturer in the world after Kraft Foods (owners of Cadbury plc) and Mars, Incorporated (owners of Wrigley). It employs 18,000 people via 35 subsidiary companies and distributes its products in over 150 countries. In July 2006, the group acquired the Spanish company Chupa Chups(also privately held), thus becoming the 3rd largest confectionary group in the world. A look at the annual sales figures:

Sales Development in Million Euros

2200

Acquisition of Chupa Chups 1832 1647 1304 1335 1320 1375 1430

1972

2079

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

As is evident from the annual sales shown above, the company has grown at a consistent & significant rate post the acquisition of Chupa Chups, making it the 3rd largest confectionary company. It recently entered the Snacks category with Stop Not

STOP NOT is a completely indigenously developed snack, inspired from the flavours of the Indian kitchen. Made hygienically, using the best raw materials, Stop Not variants have been developed by combining Indian food preferences with the most modern food processing technology. Stop Not Gol'z is an easy to eat, extra crunchy rings made from rice, gram (besan) and wheat flour. Stop Not Golz is fried in healthy oil and flavoured with spices that you'll be sure to love.

Stop Not Gol'z is available in uplifting flavours of Yummy Tomato, Full Masala, Khatti Meethi And Spicy South. The Target Segment for this category is not restricted to youth but it is being promoted as an on the go snack for any time consumption. This category of Snacks has very well established competition which is Frito Lay & Haldirams. Apart from these two players, the Indian Snack Market is much unorganised & most snacks are homemade or locally made. These homemade snacks account for more than half the Snacks market share. Considerable promotional efforts have to be made to gain considerable market share. In the Healthcare category, it has 2 brands namely Chlormint & Happydent. Happydent white chewing gum is Perfetti Van Melle's offering in Ayurvedic functional gum in the Health care category.

Happydent White an Ayurvedic Proprietary Product which contains active ingredients like: Neem, Pudina extract, pudina oil (M.Spiceta),Eucalyptus oil and Meetha soda; mentioned in authoritative text books for their therapeutic uses, have a synergistic affect in treatment means to helps promote oral hygiene (Halitosis)/gum & teeth diseases. Meetha(Baking) Soda helps in maintaining natural whiteness & thus it is positioned as "Chewing gum for a Sparkling Smile". It is currently available in three flavours: Mint, spearmint & Fruit.

Sugarfree Gum "Happydent White with "Xylitol" which contains Ayurvedic active ingredients like: Neem, Pudina extract, pudina oil (M.Spiceta) and Meetha soda; helps reduce risk of tooth decay. After meals, the pH level in our mouth drops, creating ideal conditions for bacterial growth. These bacteria result in formation of dental plaque, a thin film of bacteria adhering to the tooth surfaces, which weakens the tooth enamel, causing tooth decay. The consumption of Happydent sugar free gums gives an opportunity to experience fresh breath and also get the benefit of chewing a sugar free gum, which helps restore the pH level in the mouth to the required level, especially after having meals & thus helps prevent any further tooth decay.

In 2009, First ever, liquid filled whitening gum was launched under the brand name Happydent Wave. It is available in a Cool Fliptop pack, a Blister pack and a mono pack.

Chlor-mint was launched in the year 1997 in the Health care category as an Ayurvedic Proprietary Product which contained Herbasol that helped breath freshness. The brand has been refreshed from time to time with launch of variants like Chlormint Ice which was a strong mint and Freshfills, a unique liquid-filled mint offering in the Health Care category. Though this was a seemingly mundane product proposition, the brand was built around the platform of 'anytime freshness' meaning as and when required rather than being occasion specific. While competitors stressed only on relief from irritation in the throat or on masking bad breath, the dosage was not being highlighted, while in Chlor-mint with herbasol which is an Ayurvedic Proprietary Product, additionally dosage was being highlighted such as "anytime, anywhere meaning as and when required consumption." This positioning was reflected in the iconic "Dobara Mat Poochna" tagline in successive television commercials. Approximately 20% of the revenues generated come from this category. Other International Brands in this category are Air Action Vigorsol, Air Heads, Day Gum, Frisk, Smint & Vivident. The products in this segment are well established & have gained considerable share of the market and most of it recently. All the other remaining brands & products come under the Confectionary category. The rest of the 80% revenues come from this category. This category includes domestic brands like Big Babol, Alpenliebe, Center Fresh, Mentos, Marbels, Chocotella, Cofitos, Alpenliebe Lollypop, Creamfills, etc. The key brand for the success of PVM in India is Alpenliebe.

Alpenliebe is the flagship brand of Perfetti Van Melle and a leader in the confectionery market. The product, a rich milky caramel toffee, is a combination of milk and caramel & has a unique mouth-feel, making it an irresistible treat. Alpenliebe was launched in India in December 1995 with a distinct product proposition: The candy was an amazing mix of caramel, milk and butter It was the 1st deposited candy in the Indian market and therefore the eat experience was most unique Other than the Caramel flavour, Alpenliebe is currently available in Cream Strawberry, Chocolate, Coffee and Cream Banana flavours. The platform of irresistibility was a perfect fit with the unique product experience. Looking back at the last 10 years, Alpenliebe has successfully managed to capture the sweet tooth of kids, teenagers and adults across various sections of society. It has become synonymous with irresistibility and has become a house-hold name. Alpenliebe has resided in the world of irresistibility. - Its a world where you give into temptation without any guilt - Its a world that lets you indulge unabashedly - A world where you dont need to justify pleasure seeking Alpenliebe speaks to the child in everyone, one of the very few candy brands in the Indian market that has successfully reached out & connected with both kids as well as adults. Including Alpenliebe, PVM has about 4 brands that account for a 100 cr + revenue today, others being Center Fresh, Big Babol & Chlor mint. Its the performance & effort on these brands that have resulted in PVMs success in India. Other International brands in this category are Chupa Chups, Fruit-tella, Colia, Look O Look & Meller. Confectionery brands cut across consumer categories. All told, Perfetti has a large portfolio of 16 brands. Of these, it has decided to actively promote ten: Center Fresh, Center Fruit, Big Babol, Happydent, Alpenliebe, Creamfills, Chlor-Mint, Chocoliebe, Mentos and Marbles. These ten fetch the company almost 80 per cent of its sale revenue.

Given the clutter in the market, the only way to create brand salience is through innovative advertising. Like in other FMCG categories, large confectioners spend 12 to 13 per cent of their sale revenue on advertising and brand promotion. Moreover, advertisements need to appeal to consumers across age brackets and socio-economic groups. Perfetti commands almost a 30% market share in the sugar confectionary segment. A look at PVMs architecture:

Corporation

BENELUX

CZECH REPUBLIC

PHILLIPINES

INDIA

ITALY

SLOVAKIA

CHINA

BRASIL

TURKEY

VIETNAM

GELCO ITALY

U S A

STOP NOT HAPPYDENT

SNACKS CONFECTIONARY HEALTHCARE AIR AIR CENTER CENTER CHUPA DAY FRUITACTION ALPENLIEBE FRISK HEADS FRUIT FRESH CHUPS GUM TELLA VIGORSOL LOOK O BIG MENTOS CHLORMINT COLIA MELLER MENTOS SMINT VIVIDENT (CHEWING GUM) LOOK BABOL

Companies or Divisions Categories Brands & Products

PVM today is present with 12 divisions, in 3 categories, & more than 20 sub brands & products. Its key success factors in India were innovative products, strong brand building & constant reinvention of brands. The Brand & Product extensions were correctly timed & managed. Post the acquisition of Van Melle, it was able to integrate Van Melle throughout Asia & Europe by the end of 2002. Perfetti initially had a 37% stake in Van Melle before the acquisition. When it acquired Van Melle, it decided to retain the original name & join it with theirs so as to gain a joint image on the already existing perception of Van Melle in home country. However, it did not retain chupa chups name as it was a single brand product. On the whole, one can say that PVM enjoys high Brand Recall due its out of the box & outrageous commercials but a whole lot of distribution strategy goes into making PVM what it is today.

References http://www.perfettivanmelle.com/ http://business.rediff.com/special/2009/aug/18/spec-perfetti-success-in-india.htm http://www.perfettivanmelle.in/index.html http://stopnot.in/ http://en.wikipedia.org/wiki/Category:Perfetti_Van_Melle_brands http://marketingpractice.blogspot.in/2007/03/center-shock-hilake-rakh-de.html http://www.ibef.org/download/perfettivan_melle_india.pdf