1. AN ANALYSIS ON CONFECTIONERIES IN RURAL MARKETS
Dr.Mathew Joseph1
, Ms.Anney Chacko2
, Mr.Titty Benjamin3
ABSTRACT
The purpose of this paper is to examine the confectioner’s marketing role in tapping potential in
rural areas and to suggest how firms can help potential consumers to enhance the decision making,
thus creating a situation that benefits both consumers and the firm. This study is based on the
survey conducted in the rural area to investigate the penetration of the confectionaries brands and to
analyse the purchasing styles of rural customers. Rural market is one of the toughest markets
because the people in rural areas are both the producers (Choco) and the consumers. The paper
reveals the scope and the implications of the confectioneries in rural marketing. It also symbolises
brand loyalty and the marketing strategies which are successful in creating penetration in the
unreached markets.
Keywords:-Emerging markets of confectioneries, Rural Market economy, Rural consumers, Rural
Marketing strategy, Chocolate Consumption, Consumer behaviour.
1. Assistant Professor, BIMS, S.B.College, Changanacherry, mathewjoseph12@gmail.com
2. Assistant Professor, BIMS, S.B.College, Changanacherry, anneychacko@yahoomail.com
3. Student, BIMS, S.B.College, Changanacherry, tekminds2189@gmail.com

2. INTRODUCTION
It’s certainly not early to say that the era when fine dark chocolate was only a gift from abroad is
long gone. Chocolates in early days were considered a symbol of luxury and majesty, but now
chocolates have become an ample choice in sweets with great value and affordability. Indians like
to celebrate with sweets and they start relishing it at a pretty young age.Almost all confectionery
purchases in India are believed to be impulse driven. No wonder, the confectionery industry is one
of the largest and well developed among the food processing sectors in the country.The world of
confectionery branding is dominated in the urban markets of the world. But the urban markets are
getting too saturated and now the MNC’s have changed their strategies to tap the untapped markets
in the rural segments of the world.
OBJECTIVES OF THE STUDY
 The penetration tactics used by the multinationals in tapping the rural segments of
confectioneries.
 To analyze the leading confectioneries brands in rural segment
 To study the impact of confectionery advertising in creating pull effect in rural areas
 To examine the purchasing styles of customers
LITERATURE REVIEW
The traditional Indian sweets “Mitai” are getting substituted by chocolates among mobile Indians. Instead of
buying sweets 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. 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 Chocolates which used 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 Designer chocolates have become status symbols.
Confectionery market In India
India’s confectionery market is set to witness robust growth in the coming years. The Indian confectionery
market which is ranked 20th globally in value terms in 2011 is expected to grow at a rapid pace and jump up

3. to 14th position by 2014, said a report from Data monitor. It has been reported that the country’s
confectionery industry is the largest in the food processing segment. The market is estimated to be about Rs
1,400 crore, registering a growth of 9% per annum.The factors contributing to the growth are:
 Buoyancy in demand,
 Increasing consumerism,
 Dual family incomes
 Rising young population.
 High literacy rates (w.r.t Kerala).
Confectionery categories are chocolate like éclairs and toffees, sugar confectionery or hard boiled candies
lollipops, mints & lozenges, bubble gum and cerealbars. The major confectionery companies in India are:
 Cadbury India ( Dairy Milk, Perks,Gems, 5-Star celebrations, Bytes, Dairy Milk Eclairs,
Eclairs Crunch, Halls, Bubbaloo Bubblegum)
 Nestle India (Kit Kat, Kit Kat Chunky, Munch, Munch Pop Choc and Milkybar Crispy Wafer)
 Parle (Simply Imlee, Kacha Aam)
 HUL (ChocoMax and Max Magic candy)
 Perfetti( Centre Shock, Center Fresh ,Happydent White, Alpenliebe, Big Babol, Chloromint)
In addition to the major companies, there are numerous small chocolates manufacturers operating in India
taking advantage of the premium end segment. A few, worth mentioning are:
• Mumbai based Fantasie Chocolates
• New Delhi and Bangalore based Choco Swiss
• New Delhi based Belgique Chocolates, ITC (candy man), Parry’s and Lotto.
It’s very interesting to note the future of confectionery markets. The markets are being now focused
to tap the untapped resources in the rural areas. Many multinational companies have come together
to the conclusion that the future of confectionery market lies in the way they cater to the needs of
the consumers at the rural end. Data monitor suggests that about 75% of the future food
(confectioneries)

4. Rural Markets
The low levels and variability of income, together with the fragmentation in demand, result in
markedly different consumer needs and ability to purchase products compared to urban consumers.
This together with their geographic dispersion and the lack of an effective distribution
infrastructure requires a radical rethinking of traditional marketing strategies and the development
of new, more creative approaches to tap the latent potential in these markets. Strategy needs to
emphasize not only building a strong organization to reach large dispersed markets in these areas,
but also to adopt a broader perspective in considering consumer needs and consumptions patterns,
focusing particularly on the social and economic context of consumption and the underlying drivers
of consumption and purchasing behavior. Most importantly, it is critical to develop mechanisms to
empower consumers and find ways to enhance their purchasing power. The major growth potential
lies not in higher income consumers living in urban areas, but in the large numbers of lower income
consumers in rural areas (Prahalad, 2006; Mahajan and Banga, 2006). In India, a predominantly
agricultural nation, 71.5 percent of the population live in rural areas. The vision has long fascinated
Indian organizations as well as MNCs. And now, the dream is blazing brighter than ever as the
Indian rural bazaar is displaying a market trend towards consumerism, outpacing the urban market
in its ever-increasing demand for durable products like wrist-watches, fans, televisions, video
cassette recorders as also non-durables like chocolates, nail polish, lipstick, ice-cream, shampoo and
mosquito repellents’.
Identifying the rural market:
Rural consumers in emerging market countries are among the largest and fastest growing segments
of the world’s population. While consumers in rural areas typically have low per capita incomes,
their large numbers offer sizeable market potential. Many are small farmers who grow much of
their own food, particularly staples such as grain, or rice as well as vegetables. Often there is
substantial bartering and a sizeable informal economy which does not appear in official statistics.
Consequently, the low figures for per capita income underestimate actual standard of living, as well
as ability to purchase non-food items. In addition, increasing awareness of high rates of growth and
consumer affluence in urban areas, as well as growing availability of branded goods at a range of
different price points, generates aspirations among rural consumers to purchase the branded goods
which offer promise of better quality and are symbols of participation in a more affluent consumer

5. lifestyle .The total market is normally too large and fragmented to be viable target for a firm's
marketing efforts. Therefore, a business will select a target market-a group of customers with
similar characteristics who currently, or who may in the future, purchase the product. Two broad
approaches can be adopted when selecting a target market: the total approach or the market
segmentation approach Total market approach-applies when a firm targets the total market for a
particular product. The firm develops a single marketing mix and directs it at the entire market for
the product. This means there is one type of product with little or no variation, one promotional
program aimed at everyone, one price, and one distribution system used to reach all the customers.
Purchasing styles of rural customers
The demands of confectionery are finding immediate progress in the Rural markets. The rural
customers are very brand loyal, once they have tried a certain brand of confectionery and they have
found its economical and good they would be driven back to purchase the same brand again.
Advertisements also play crucial roles in rural areas and the impact of it is worth mentioning. In
rural areas because of advertisements the brand becomes a trend. Rural consumers are very brand
loyal and not so demanding. They limit their preference of confectionery brand for a certain period
of time. Thus rural markets are one of the safe havens for successful and admired brands.
Almost all confectionery purchases in India are believed to be impulse driven. Experts indicate that
chocolates confectionery and gum products consumption are driven almost entirely by impulse
purchasing. The figure is lower for chocolates (about 70%), because of its increasing popularity as a
gift for various occasions and during the festival season. In their effort to increase consumption and
product penetration, marketers have started to promote some products as appropriate snacks, not
just an indulgence. Once an indulgence, sweets are becoming part of everyday life, consumed on-
the-go. And western confectionery is replacing traditional Indian sweets as they have longer shelf-
life and are more aggressively marketed. Sugar confectionery, by contrast, is the slowest growing
segment of the market forecasted to grow at a compounded annual growth rate of 5.5 per cent until
2014. But the average Indian person’s propensity for sweetness – which has given India the dubious
reputation of being the “diabetes capital” of the world – has meant that the sales of low-sugar
products and dark chocolates remain low. This trend is changing, however, especially in the urban
areas. Chocolates come under the category of products purchased in impulse. Though the market is
marred by brand loyalty the purchase decision itself is a low involvement decision. This attitude of

6. impulse buying is slowly changing to occasion-led buying and now changing the market is slowly
moving from sugar boiled confectioneries to Dark chocolates and also to Wafer chocolates due to
lower price and ready availability. Consumers purchase chocolates primarily to quench their
craving. This accounts for a large part of the sales. Brand awareness plays a crucial role in purchase
decisions. Consumers prefer convenient and economy products. While there is no aversion to
consumption of chocolates by an age group, the main consumers of this market are people in the
age group of 30 and below. Product differentiation is very high, as all the products taste different in
some or other way. But brand loyalty is high in the case of kids and people in the age group of 10-
20 yrs. Consumers are sensitive to the outlay where the purchase of chocolates is concerned. Hence
the market is price sensitive. Due to the low cost of these chocolates, a lot of times consumers
prefer them over traditional sweets.
RESEARCH METHODOLOGY
Research Design:
Under this a cluster sampling was used. The study was conducted on the basis of survey carried out
at districts of Kerala in Kottayam, Pathanamthitta, Alleppey. The data for the survey was collected
through Direct Personal Interview with the confectionery retailers and the consumers. The method
of data collects are primary and secondary data. The primary data was collected through interview
method. Personal interview were done to collect data from the respondents. The secondary data was
collected from (i) Technical and Trade journals (ii) Reference book, magazine and newspaper (iii)
Article’s from Web Resources.
The population for our research was all the retailers and the consumers of Kerala. For the research
purpose we took three districts from Kerala Circle such as Kottayam, Pathanamthitta, Alleppey.
Total sample size was 200 which included Retailers(100) and Consumers(100).
RESEARCH FINDINGS
Rural market share of confectionaries: - In the study it was revealed that Cadbury India was
losing the rural market share to Nestle India. Nestle India (Munch, Kit-Kat, Milky Bar )was able to
capture a whopping market share of 40.62 % beating Cadbury India by a gain of around 4% in the
rural market followed by other players like ITC,Lotte,Perfette,Parrys holding a share of 21.88%.

7. Brand penetration:- One of the most successful brands is Munch, with their aggressive
campaigning they were able to capture and create Brand space in the Rural Arena. Their Television
Ad of “Mera Crunch Mahan” featuring Bollywood Actress Rani Mukerji’s was such a hit among
the children that even today children are fans of that Ad and demand munch as Rani’s chocolate in
rural areas. The reason why the Ad was a hit because the ad depicted the Ms.Rani as a villager and
showed the true picture of Rural India
Brand conscious: - It’s found that rural consumers are now highly brand conscious in case of the
confectionaries. Out of 100 houses being surveyed it was found that 78 houses demanded only
branded confectioneries, 6 households only preferred foreign confectioneries and 16 households
didn’t have any distinction for branded or Unbranded confectioneries.
Brand Awareness:-Out of the survey conducted on 100 retailers conducted in a rural area it was
found that 78 retailers argued that the people are now better brand conscious and they demand
better quality confectioneries while rest of 28 % retailers voted out stating that they didn’t feel a
brand push.
Market share & Preference:-In the consumer Survey it was found that even though Munch was
the most popular product among the rural consumers, Dairy milk was the most preferred chocolate
.In terms of chocolate content and taste 68 household voted for it, with 12 household for 5-star, 10
households for Munch, 8 households for Perk, and 2 households voted for Milky Bar respectively.
Promotion Strategy:-Nearly 86 households stated that television ads were the most successful
promotion methods, while rest 14 households stated that they have known these brands only after
seeing these brands in the shops as display and after retailers suggesting them to purchase and try
the chocolates.
93% of the Retailers commented that the sales were hugely affected by the offers like freebies on
purchase of confectioneries. Rest 7 % agreed on factors like Extra content and special price
Chocolate sales:-Most of the retailers in the rural market were successful in selling the Branded
confectioneries with a Sales Range of Rs 300 to Rs.1200. at an average of Rs 700 per week. It’s
delightful to note that none of the retailers had complaints about selling of these branded
confectionery, although they demanded a slight increase of the profit margin.

8. About 85% of the retailers said that their stock gets exhausted within a week and the distributors are
very powerful in the rural locality. Their confectionaries in the shop never get stock out. About 17%
of retailers get their stock every fortnightly and only 3% have trouble in selling out and they too get
their stock once in every month.
Retailer’s perception:
A survey was conducted to study the retailers’ views of the present market, future trend and the
consumer behaviour patterns. The findings of the survey are as follows:
Most of the consumers are school children 54% of retailers are successful in suggesting and selling
different brands than what they had asked for. All the retailers agreed on the fact that Information
transfer from the Company to them is very less. Sometimes when customers demand the product
retailers are forced to check up, rather than the company informing the retailers about the new
arrivals. Retailers stated that the consumers are loyal to the particular segment of the confectionery
brand. But as far the loyalty for the brands in each segment is concerned, it is not very significant.
43% of the retailers surveyed told that in confectionery advertisements in Televisions is the key
component in driving sales. While 32% stated promotional schemes and 20% brand loyalty as the
reason. As consumers are not very brand loyal where the purchase of confectionery is concerned,
the retailer push becomes a critical issue. They usually sell the product in which they get the
maximum benefit
Penetration tactics
Most of the promotional strategies implemented by the Confectionery companies are well focused
on tapping the rural area grounds. All the advertisements were able to create a long impulse wave
across the rural customers. Despite the confectioneries market growing substantially in India, it was
still considered an indulgence product and not a product with a specific or necessity consumption.
Cadbury is trying to position itself as the new sweets. It shows how it is not only considered better
but also superior to carry Cadbury instead of the normal sweets.
Customers Perception
In the year 2010, the `Shubh Aarambh’ campaign was launched Cadbury Shots introduced for Rs 2
is also a huge success. Current campaign ‘Khaane Ke Baad Meethe Mein KuchMeetha Ho Jaaye’.

9. All these campaigns were loved by the consumers, because every time Cadbury was able to connect
the people of India with the sweetness and their advertising Mantras.
The current noteworthy advertisements “Jo Khaaye Kho Jaaye” proposition of 5 Star has been
enlivened by the lovable duo of Ramesh – Suresh, who get lost in the involving taste of 5 Star. The
duo has gained huge popularity through successive media campaigns. These advertising have a
rural touch which reveals a slight inclination towards the rural segments. Munch is brand which has
been innovating to keep the excitement going.Munch earlier had come out with a Coconut variant .
Another major innovative variant was the Munch Pop Chocs. Pop Chocs are chocolaty nibbles in
the form of wafer cubes. This variant is also promoted by Rani Mukharjee. The rural consumers
were so excited that they demanded Munch chocolate as “Ranis chocolate”. When Perfetti Van
Melle (PVM) came to India, they promoted their flagship products by coining taglines. It allowed
them to create a difference in the consumers mind and these expressions were borrowed from
everyday usage of the youth. These all campaigns have found places in the heart of confectionery
consumers in rural areas.
Shifting Consumer Targets
Traditionally, the confectionary companies considered only children as their target market and
confectionaries advertisements were always targeted at children. But stagnancy in growth rates
made the companies re-think their strategies. Cadbury was the first company that repositioned its
brands for adults.
Its new advertising punch of Dairy Milk is the best example where in a young couple shares light
moments. With the current campaign ‘KhaaneKeBaadMeethe Mein KuchMeetha Ho Jaaye’, the
aim is to introduce the thought of having a Cadbury Dairy Milk as a post dinner meetha (dessert).
SUGGESTIONS
(A) For new players
 Exploit growth opportunities across various Confectionary Market segments in rural areas
through proper branding.
 Devise market-entry and expansion strategies with intensified Advertising for the various
Confectionary Market segments in rural areas.
 Understand the competitors operating in the Indian Confectionary Market in rural areas.

10.  Identify key growth markets for your products from the region-wise market research.
 Identify the strengths and weakness of key players in this Industry by using SWOT
analysis of India Confectionary Market.
 The Indian food distribution system is characterized by a large number of intermediaries
and relatively poor infrastructure, such as transportation, storage, and refrigeration
facilities. It has low levels of efficiency, with the costs of distribution being rather high.
Manufacturers and importers will have to carefully look at this issue and devise solutions.
 Based on the SWOT, develop business strategies by understanding the trends and driving
force of Confectionary in market.
(B) For existing players
 The Retailers are very happy because they never get stock out. That’s all because of
the integrated web of distributors who are very energetic in placing up the stock to the
retailers.
 The confectionery company should be able to inform all the retailers about any new
product launches.
 Attractive packaging is very important for the brand image. Indians associate quality
with good packaging.
Researchlimitations
The major limitation of this research is that, it is based on the results of the survey conducted in
rural districts of Kerala with a small sample size drawn from the population.
CONCLUSIONS
Although certain sectors of the confectionery industry have reached maturity in many parts of the
world, the global market continues to grow. Much of this recent growth has come from the
developing countries like India, aided by the spread of multinational suppliers & their brands, as
well as a growing base of increasingly affluent consumers. As the Indian market hots up, the intense
competition is making companies launch new products, expand capacity & reach, and adopt
innovative strategy. Overall, the stage is all set for a battle between some of the leading
confectionery brands to capture bigger pie in the confectionery market. The bigger pie in this
picture is the emerging rural markets in India. The confectionery consumers in this segment are

11. attracted by the business tactics of these multinationals and are very brand loyal. Rural India
especially is the call of the hour for the confectionery.
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