CASE STUDY ON Perfetti’s Distribution StrategyPresented by :•Prasad Kumar Nayak.
About the company This is the first MNC company diversifying in to snacks business. Perfetti van melle is a ITALY based parent company. It have 31 manufacturing in world wide, 3 manufacturing locations in India (Manesar Plant, Chennai Plant & Rudrapur Plant). It has 5000 distributors service worldwide.
Continues: It entered in india in 1994. Sameer suneja is M.D. of perfetti india. It employs 18,000 people via35[subsidiary companies. It distributes its products in over 150 countries. Product quality Food safety management system CSR (corporate social responsibility)
Stop not golz Time to wait, STOP! Time to snack, STOP NOT!
Alpenliebe Alpenliebe was launched in India in December 1995 with a distinct product proposition.
Alpenliebe lollipop The brand positioning of „Lagey Raho‟ reflected in the communication, not just communicated the product experience but went beyond. It communicated the pleasure of the long lasting lollipop. In the year of launch (2001) Alpenliebe become the market leader with 46% market share.
Alpenliebe Mangofillz Mangofillz has taken forward the overall brand platform of „irresistibility‟ while keeping the focus on the „mango‟ taste of the product. Kajol, the Alpenliebe brand ambassador, is being brought in to provide a connect with the parent brand and bring in its heritage,
Alpenliebe Creamfills It is a Caramel Candy with a cream filled center. It was launched as a brand extension of alpenliebe as an innovation in 2005 but within four years it has carved its own identity. Creamfills is positioned on surprise where one gets more than expected, as the base line says “What a surprise”. When launched it was an innovation and the only candy available with a filling inside and till 2009 the positioning was of “Kuch Alag Achanak”.
Big Babol Big Babol was launched in India in 1995. It has been positioned on the fact that how you can use big bubbles to your advantage and make Big Babol “Bade Kaam ki Cheez”. Over time,
Center Fresh Center Fresh, the flagship brand of Perfetti Van Melles was launched in 1994. It was the first liquid filled chewing gum . It is available in Spearmint, peppermint and Sweet mint flavours and in the Re 1 mono and 5 pcs Rs 6 stick. Center fresh truly “Rakhe Zubaan pe lagaam”.
Center Fruit Center Fruit was launched in the year 2006 as India‟s first ever fruit-flavored liquid-filled gum. It was launched with 2 tantalizing flavors – Tutti Fruity and Grape. Initially, it rode on the strong equity of Center Fresh but over the years, the brand has carved a niche for itself and is one of the fastest growing brands in Perfetti Van Melle portfolio today. In addition to Tuttii Fruity and Grape, the brand has added 3 more delicious flavors - Strawberry, Watermelon and Sweet Mango.
Chocoliebe Launched in 2006 over the past four years, Chocoliebe is Perfetti Van Melles premium offering in the éclairs segment. Since 2006 we have built the brand on the premise of a “rich chocolate & soft caramel” which was implemented by the first communication of “Pyar Do. Pyar Lo”.
Mentos Mentos started its journey in India way back in 1999, under the Freshmaker positioning. But the Mentos story starts in 2002, when it was re-launched. Subsequently in 2003. it got an Indianized positioning of “Dimaag ki Batti Jala de” pertaining to smart thinking
Chlor-mint (candy & gum) 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 built a unique place for itself in the consumers mind, so much so that Dobara Mat Poochna is part of everyday parlance meaning . In order to widen the appeal of the brand, Salman Khan was chosen as the brand ambassador in 2009. currently the tag line is “chaba daba ke khao”.
Happydent The "Palace" commercial swept all creative awards in India and bagged two awards at Cannes. Truly, Happydent is a "chewing gum for a sparkling smile " Jagmaga le, Muskura Le”. It comes in three flavor happident white, happident wave, happident sugar free.
Marbels So enter the wonderful world of Marbels „Coz “Marbels Ki Duniya Main Kuch Bhi Ho Sakta Hai!”
Center shock Innovative products that WOW you and are fun to make as well! This extremely sour gum with a sweet heart was launched in India in 2002. Once you got over the Shock, you could taste either the Green Apple or the Peach flavored sweet center.
Q.1: Analyze the distribution strategy of Perfetti, whichenabled it to become a leading player in the Indianconfectionary market. BEFORE MERGER IN INDIA The company offered hefty sales-linked incentives such as increase in margin in percentage terms with increase in sales and offered one pack free on every pack sold. AFTER MERGER WITH VAN MELLE IN INDIA Brought a distribution network of 3 lakh outlets which today become 10 lakhs FOCUSED ON POP OUTLETS –WHO ARE UNABLE TO PUECHASE LARGE QUANTITY
CREATED A MULT-TIERED DISTRIBUTION SYSTEM . Divided Its11brands In To Two Groups P1and P2 Non-conflicting brands like Alpenliebe original, Chlormint, Big Babol and Center fresh were grouped under P1 CenterShock, Chlormint gum, Mentos, Marbels, Fruit-tella and Happy Dent were planted in P2 Perfetti spends Rs17 crore for advertising and marketing of the product to attract customers and to improve sales.
The product allotment and commission strategy adopted by perfetti led to discontent among the channel members. Explain the company’s rationale in adopting such a distribution strategy.
Perfetti entered into the Indian market. During the entrance in the Indian market, Perfetti did not merge or acquired any company. It adapt the simple way that how much the goods wills be demand that much will be supplied. The great change occur when it acquired the van melle The acquisition brought a distribution network of 3 lakh.
Instead of expanding the distribution network over a large of region, they focused on specific areas . Company focused on small retailers . Small retailers unable to purchase large quantity. Retailers were not willing to buy the same brands twice a week. Some brands are perceived as substitute by the retailers.
To solve this problem and to keep flow of product in the market, the company had divided their product into groups. P 1 group consists of Alpenliebe original, Chlormint, Big Babol. P2 group consisted of Centershock, Chlormint gum, Mentos, Marbles, Fruit-tella and Happy Dent.
The company paid 5 percent margin to the distributors compared to the average industry figure of 10 percent. Retailers were paid 15 percent when the industry standard was around 30 percent. These are the basic reason for product allotment and adapting such strategies.