Final marketing project mm 1&2 gr 2 ss

Abhishek Kumar JhaAbhishek PalAnand KumarAnulika SinghNimesh ShuklaPamela RoyPrasenjeet Tewari

CHOCO HONEYMarketing plan : MM-1&2

PGDM 2012-14 IMI-K

AGENDA

1. Market Overview

2. PEST Analysis: Chocolate Industry

3. Company overview: Dabur

4. Product summary

5. Porter’s five forces

6. Competitors analysis

7. SWOT analysis

8. Market research & Product definition

9. Segmentation

10. Targeting

11. Positioning

12. Marketing mix

13. Showcasing : Product

MARKET OVERVIEW

• The chocolate market in India is pegged at 2,000 crore and is growing at a rate of 18-20 per ₹cent per annum.

• Increasing consumer demand has led to more and more players entering the market.

• The industry is extremely fragmented in terms of range of products.

• The two giants Cadbury with 70 per cent and Nestle around 20-25 per cent have been instrumental in building up the chocolate market in India.

• The chocolate is worth 3,200 crore in India of which Cadbury Kraft Foods has a 70% share, ₹20% is held by Nestle and the others operate in the remaining 10%, which forms around 310-₹320 crore.

• Some of the foreign players are Mars, Guylian, Lindt, Hershey’s and other Swiss chocolates.

MARKET OVERVIEW

• The size of the market for chocolates in India was estimated at 38,000 tonnes in 2012.

• Bars of moulded chocolates like amul, milk chocolate, dairy milk, truffle, nestle premium, and nestle milky bar comprise the largest segment, accounting for 37% of the total market in terms of volume.

• The chocolate market in India has a production volume of 39,400tonnes.

• The chocolate segment is characterized by high volumes, huge expenses on advertising, low margins, and price sensitivity.

• The chocolate market today is primarily dominated by Cadbury and Nestle, together accounting for 90% of the market.

ENVIRONMENTAL ANALYSIS

PEST/OT O T

PStable democracyFavorable government policies.

Coalition govt.

E

Fast Emerging economy with a population of over 1.25 billion.Recession Proof product market, Early product life life cycle..FDI – 100%₹25000 crore of Market, growing@ 20%.

SRising Consumer Disposable Income among high and middle income growth Change in consumer preferences from sweet to chocolate.Change in Lifestyle trend and food habits

ObesityOther health disorders

TAvailability of skilled man power.National Dairy Research Institute.

Perishable product-storage & transportation.Heavy dependency on import for cocoa.

LFSS Act, 2005 High compliance

COMPANY OVERVIEW : DABUR

One of the largest FMCG Company of IndiaConsolidated Turnover of 5283 Crore (about $1 billion) FY 2012₹ .

Differentiated ProductStrong herbal and natural profile

More than 100 years of exp. in Ayurveda

Wide distribution networkCovering over 3.4 million retail outlets all over India

High penetration in urban and rural area

Brand strengthStrong brand in diverse categories

Mother brand DABUR trusted for natural and herbal health care

₹12 billion brand value

Strategic PositioningHoney as food product, leading to market leadership (over 75%) in branded honey market

Chocolate Industry : India

2012 2030 2050

Rs 2000 Cr

PRODUCT SUMMARY

Product Name: Choco Honey

Product: Close to new line of business

Product Tagline: Swad Se Sehat Ki ore

Strategic positioning of Honey as food product, leading to market leadership (over 75%) in branded honey market of Dabur.

CadburyNestle

Foreign Players& Domestic Big Players

Cocoa Suppliers Consumers

Sweet shop, cookies, cakes,

Gifts

Bargaining power of suppliers

Threat of new Entrant

Bargaining power of Buyers

Threat of substitutes

Porter’s five forces

Competitor Analysis: Cadbury

• Cadbury is a confectionary company owned by Kraft Foods and is the industry's second-largest globally after Mars, Incorporated.

• With its headquarters in Uxbridge, London, England, the company operates in more than 50 countries worldwide.

• Cadbury was incorporated in India on 19 July 1948. • Cadbury Kraft Foods has been a market leader in the chocolate category since the last 64

years in India.• It is the market leader in the Indian chocolate confectionery business with a market share of

over 70%.

Competitor Analysis: Nestle

• Nestlé’s first sales agents in India began work in Chennai and Kolkata in 1912. • Today, the company directly employs 6,000 people in India and more than half a million

indirectly.

• Its products are sold in more than 3.5 million outlets across the country.

COMPETITOR ANALYSIS: PRICING

• Price is same all over India.

• Competitive pricing.

• Due to price hike in raw material and labour cost company had not increased the cost of product but reduced the weight of product.

• Eg. 5 pack was of 13gm but now it is 10.5gm₹

SWOT ANALYSIS (DABUR)

Location of Factor

Type of Factor

FAVOURABLE UNFAVOURABLE

INTERNAL

StrengthBrand NameStrong distribution systemDeep penetration

WeaknessRequires suppliers for cocoa and milkInadequate storage facilities

EXTERNAL

OpportunityOpen to try new brandOnly few honey flavors existIncreasing demand

ThreatImport PoliciesRising raw material costIndustries stretching their operations Duopolistic market

Market Research : Understanding the consumer

Buyer motives


1. Why do you purchase chocolates ?


2. Which is your most preferred brand for chocolates ?


3. Why do you prefer this brand (chosen by you) ?


Buyer Habits


4. How often do you buy chocolates ?


Psychological process underlying buying decisions


5. What do you focus while buying a chocolate ?


6. Do you perceive chocolate as a health product ?


Participants and roles


7. You buy chocolates for :

MARKET RESEARCH

1. Which flavour of chocolate would you prefer ?


2. How do you perceive honey ?


4. In which form (shape and size) would you prefer chocolate ?


6. Are you ready to try out a new brand of chocolate ?

DEFINING PRODUCT

Name : CHOCO HONEY

Attributes :

Sweet in taste

Ingredients: Honey, Tulsi, Chocolate.

Price range : 5-50₹Flavours : Just honey (5-20 category),Rich Almond and Nut(20-50 category).

Value : Taste and health

SEGMENTATION

• Demographic : Consumers within the age group of 5-40

• Geographic : In and around Kolkata

• Based on our extensive Market research one third of our consumer preferred chocolate in the price range of 20-50, while more than10% preferred for price segment more than ₹

100.₹

• That indicates people from middle class and educated middle class are significant part of our consumer base.

TARGETING

• Based upon our Online Market Research we shall Target following segment of population:

• For Kolkata region and surrounding urban

sector

• People from SEC A1, A2, B1, B2

For Rural region:-• People from R1 & R2 shall be targeted.• Process for targeting:• Sweet loving consumers• Consumers who consider sweets as gifts

POSITIONING

• Combines the taste of chocolate with the delicious taste of honey.

• It will compete against products like Dairy Milk by Cadbury and Milky-bar by Nestle.

• Differentiator : The combination of chocolate with honey.

• Focus on health.

MARKETING MIX

Product• Honey and Tulsi combo based Chocolate. 10.5gm, 22gm, 95gm

Price• ₹ 5-20 (Bar)• ₹ 20-50 (Cartoon shaped)

Place• Schools, college canteens, offices.• Mom & Pop stores.• Dabur’s retail network and dealers.

Promotion•Television commercials•Celebrity endorsement•Posters and billboards•Print media•E-marketing


3. How much are you ready to spend on a chocolate ?

SHOWCASING : PRODUCT

Chocolate coating

Honey +Tulsi

Category ( 5 - 20)₹ ₹

SHOWCASING : PRODUCT

Cashew nut

Almond

Category ( 20 - 50)₹ ₹

WHAT WE DID IN MM-1?

TARGET MARKETSTRATEGIES

COMPETITORS

SWOT ANALYSISMARKET ANALYSIS

So far we have done…… (MM-I)

• The firms obtain competitive advantage and synergy through integrated programs between the marketing mix variables (product, price, communication, and marketing channels) and the consumer behaviour aspects.

• Marketing Objective is to create and deliver value, this time we are here to deliver Choco Honey to our target customer to capture value in return.

MM-II FOCUS

Dabur ltd.

Chocó Honey

Chocó

Honey

Chocó Honey

Manufacturing Plant

Warehouse

INBOUND LOGISTICS

Retail Store

Chocó H

oney

Choc

ó H

oney

Chocó

Honey

Manufacturing Plant

Warehouse

Chocó

Honey

Hyper market

OUTBOUND LOGISTICS

GOALS

SYNERGYCOMPETITIVE ADVANTAGE

POSITIONINGTARGET

CHOCO-HONEY’S DISTRIBUTION CHANNEL STRATEGY

Marketing Strategy and Distribution Channel Design

• A conduit between manufacturer and customer.• Not possible to reach out to potential target

customer in a cost effective way.• Choco-honey, being a convenience good, requires

extensive distribution.• To deliver value to the customers through the best

possible channel.• Cost effective – Distribution sales force

DISTRIBUTION OBJECTIVE

• Multichannel distribution system.• Push strategy.• Nearby location(customers).• Intensive distribution.

STRATEGIC DISTRIBUTION DECISIONS

PRODUCER

WholesalerSupermarkets

Convenience store

Departmental store

Highway Retailing

Hypermarkets

CHANNEL INTERMEDIARIES

• Channel Management• Channel Power• Relying on core competency of strong

distribution channel of Our company.

CHANNEL MANAGEMENT

PRICING STRATEGY

Nature of Chocolate Industry : High volumes Huge expenses on advertising Low margins Price sensitivity

We will prefer Market-penetration pricing

Reaching out to maximum number of consumers and acquiring market share is of prime importance at this stage of our product life-cycle.

MANUFACTURING COSTS AND OVERHEADS

Budget Allocated for this project : 20 crores₹

1. Cost of raw materials (cocoa beans, milk, sugar, honey, tulsi, cocoa powder, nuts) = 2 crore₹

2. Cost of transportation of raw materials = 20 lakh ₹(@ 1505.20 per tonne freight charge from Kerala to Asansol, ₹carriage charges from manufacturing plant at Asansol to warehouse in Kolkata, transportation of milk from Jharkhand to Asansol, carriage charges to retailers, distributors)

3. Cost of setting up factory, warehouse and equipment = 5 crores₹

SELLING AND DISTRIBUTION COSTS

Budget Allocated for this project : 20 crores₹

Total marketing budget out of this (@25% of the project budget)

= 5 crores₹

Start-up marketing activities : 60% of allocated marketing budget• Brand Building Cost (@20% of allocated budget) = 1 crore₹• Promotional Activities (@40% of allocated budget) = 2 crores₹

Run-rate marketing activities : 40% of allocated marketing budget• Margins to downstream distribution channel network (@10% of allocated

budget) = 50 lakhs₹• Price adjustment strategies – discount and allowance pricing (@5% of

allocated budget) = 25 lakhs₹• Commissions, Bonuses, Incentives to sales agents (@25% of allocated

budget) = 1.25 crores₹

BREAK EVEN ANALYSIS AND TARGET PROFIT

5 cr

20 cr

1 cr

1 crore

VALUE BASED PRICING BASED ON SURVEY

Based upon our Online Market Research we find that consumers are ready to pay in the range of 5 - 50.₹ ₹

VALUE BASED PRICING ( 5- 20 RANGE) ₹ ₹

Name : CHOCO HONEY

Attributes :

Sweet in taste


Price range : 5- 20₹ ₹Flavours : Just honey


VALUE BASED PRICING ( 21- 50 RANGE) ₹ ₹

Name : CHOCO HONEY

Attributes :

Sweet in taste


Price range : 21- 50₹ ₹Flavours : Rich Almond and Nut


Five promotion mix tools for communicating customer value :

• Advertising

• Personal selling

• Sales promotion

• Public relations

• Direct marketing

PROMOTION

Outline the communications process and the steps in developing effective marketing communications

• Identify the target audience

• Define the communication objectives

• Find highly credible sources to deliver messages

• Collect feedback.

PROMOTION

Promoting in small packs or candy style.• Children’s park• Substitute gifts for petty cash • Complementary gift• Separate display designs• Encouraging customers• Doctors’ desk• Blood donation camps

Ways to promote

• Basing objectives on Target Market, positioning and marketing mix

• Communicating Customer Value• Informative Advertising• Persuasive advertising as competition increases

ADVERTISING

• Will communicate customer value• Build Choco honey’s image under the brand umbrella

of Dabur.• Explain how the product works• Suggest new uses n attributes • Inform the market of price charges• Correct false impressions if at all

INFORMATIVE ADVERTISING

• Setting advertising objectives• Setting the ad budget• Developing an advertising strategy-Advertising messagesAdvertising Media

AD-WORDS

• Press relations or press agency• Product publicity via publicizing• Managing Public affairs actively• Lobbying with legislators and government officials to

influence decisions• Investor relations• Development of PR with donors and NGOs

PUBLIC RELATIONS

THANK YOU

CHOCO HONEY

Choco honey

Swad se sehat ki ore

THANK YOU

Final marketing project mm 1&2 gr 2 ss

Business

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