Strategic Marketing & Planning

STRATEGIC MARKETING & PLANNING “ CANDYLAND ” SUBMITTED BY: NISSA RAZZAK (4635) SAAD AFTAB (3790) SANA KAMAL (3548) SUBMITTED TO: SAMIN AHMAD

EXECUTIVE SUMMARY CANDYLAND is one of the strategic business unit of ISMAIL INDUSTRIES. It was established in late 1990. CANDYLAND under the umbrella of “Ismail Industries” has been known as an innovator and a trend setter in its product categories, using brand extension and product extension. Major competitors of CANDYLAND are Hilal, Kidco, Cadbury, Mayfair & unbranded confectionary manufacturers. The domestic confectionary industry is highly fragmented. CANDYLAND has market share of 12-14% in the confectionary industry of Pakistan. Tough competition due to the Low-involvement products. CHILLI MILLI is an iconic within the confectionary industry and the single targeted product in the jellies market.

EXECUTIVE SUMMARY They choose unique recipes and strive to maintain the highest quality standards at all costs. The USP of CANDYLAND is based on Innovation, Distinction & Differentiation. PREMIUM BRANDS- Not in terms of price but in terms of value Intensive distribution strategy is followed with much more emphasize on market penetration. The main strategy in promotion is to Break the Clutter by showing Innovation Premium based pricing due to high quality products The company takes months to develop the packaging, even at times more time than to develop the product itself. Sub-brands are targeted towards kids and teenage girls and boys.

A BRIEF INTRODUCTION ABOUT CHILLI MILLI-FLAGSHIP BRAND Sweet yet tangy that instantly connected with the taste buds of Pakistani consumers. It has been such a big hit because it is a local concept There are a lot of jellies all over the world but CHILLI MILLI is unique. Every kid knows about it, likes it and eats it. It’s an iconic within the confectionary industry and the single targeted product in the jellies market. CHILLI MILLI retails for five to 10 rupees (for different SKUs), which is the highest price for any confectionary in the entire local market. In terms of export potential, CHILLI MILLI has done extremely well. Although CANDYLAND exports a vast array of its confectionary range to the other countries, most of these products are repackaged and marketed under different names by foreign companies. CHILLI MILLI is CANDYLAND’S only brand that is exported under its own name and packaging because it has found a market abroad among Indians and Hispanics whose tastes are similar to those of Pakistanis.

ANALYSIS OF CURRENT MARKETING STRATEGIES

UNIQUE SELLING PROPOSITION The USP of CANDYLAND is based on the following three factors: INNOVATION -innovative product categories such as CHILLI MILLI Flavoring in jellies, Marsh Mallows, and center filled candies. DISTINCT PRODUCTS -product & brand extension in different product categories with distinct shapes, colors, flavors and packaging DIFFERENTIATION -In order to attract the consumers more and more, the products of CANDYLAND are placed in very attractive stand out trays which set them apart from their competitors .

CUSTOMER FOCUSED STRATEGY They provide hygienic products to their customers. Consistent Quality – “No to JND” (Just Noticeable Difference) Quality- Product quality lies at the core of the company, recognized & verified by health and safety measures and international quality standards like HACCP and SANAH, for quality. If people have any problem they are most welcomed to approach them and they seriously take their suggestions into consideration to serve their consumers and getting their feedback will help the to achieve their goal .

PRODUCT STRATEGY CANDYLAND under the umbrella of “Ismail Industries” has been known as an innovator and a trend setter in its product categories, have extended in to the following categories: Marshmallows Candies Toffees, chew toffees, bubble, chewing gums Lollipops Jellies Chocolates Each portfolio is further extended into different varieties for example toffees is divided in to plain and filled toffees. Jellies are available in weights from 1g to 30g per piece. These are packed individually in small or large bags, by weight or numbers and also in bulk packs. Jellies are based on a combination of gelatin, pectin, and starch, with different variety of shapes.

PRODUCT STRATEGY Candies are manufactured in ball, oval, disk and bar shapes and have variations in weight, color, flavor and texture. Marshmallows was the most recent extensions of the range of products offered by CANDYLAND, with further expansions in chocolate manufacturing capabilities by the middle of 2006. CANDYLAND innovated and launched a product that no other confectionary manufacturer in Pakistan had ventured into at that time-Jellies. The company is committed towards its consumers; working to build customer expectations and then striving to meet and exceed their expectations by focusing on their new demands and tastes through research. Indirect competition with ice-cream, as the sales of candies increase in winter season as comparatively to summer season, in which the sales of candies get little bit lower.

SEGMENTATION Level of Competition Product definition Illustrative Competitors Need/Want GENERIC Sugar and confectionary products All confectionary manufactured companies To satisfy immediate cravings Product type Chocolates Cadbury, Hilal Sweet Product Variant Coated Jellies (e.g.CHILLI MILLI) Mirch Masala by Hilal Sweet & tangy taste

TARGETING STRATEGY The relevant segments to which “CANDYLAND” caters, varies from product to product just like any other name in the industry. The Target market would be hard to define, the primary reason being the huge product portfolio having more than 120 products catering to different target audience. “ It is not always necessary that brand managers identify the target segment very effectively” (Aisha Ameen, Brand Manager, CANDYLAND) The brand has gained focus by penetrating into the right segments, that is directing their efforts directly at schools where they can best focus on their target audience (Kids), rather than focusing on aggressive marketing channels such as advertising and sales promotion which have a vulnerability to effect the brand image by even a single mistake. Moving down into lower class: C CLASS, the huge market of African countries as well as the local markets rural areas of all the 4 provinces of the country .

*In A class: Anyone who is earning more than 25000 and Inter / A Levels TARGET MARKET & CONSUMER PROFILE Products/Brands Demographics Lifestyle Attitudes Influencers Chocolates(Sonnet) is focused towards teenage boys Jellies(CHILLI MILLI) is focused towards teenage girls and college going girls 12-19 year old Single Students Sec A* & B Majority are students Music, mobile phones, internet and hanging out with friends at malls and cafes are their favorite time pass Fast Food trend The group is highly conscious about their physical appearance Their choice driven by their peers Highly brand conscious because they want to appear cool and trendy and have a good impression on others Jellies Lollipop Candies Chewing gums Marshmallows Chew Toffees Chocolates 5-8 8-12 males and females (students) Sec A & B Young boys & girls who lead busy lives They spend their days in school at tuitions, in madershas, and then doing their homework They want to be the best in their peer group and want independence. They want to engage in all activities that help them stand out and are fun Peers, parents and advertising influence their choice.

BRAND STRATEGY Vision-Keeping into account the existing global economic meltdown, the company aims to increase its market share to 25% from an existing share of 12-14%, emphasizing and directing the company’s focus on the local market. PREMIUM BRANDS- Not in terms of price but in terms of value To continuously leverage and build the brand The main focus of the company is to increase the brand awareness of CANDYLAND, consumers are well known to the sub-brands of the company which are well established, but are not aware of the parent company The company believes that no matter how rapidly the trends might change, a product should not be repositioned until and unless its performance is really declining.

PRICING STRATEGY In pricing, they have to keep in consideration the prices of raw materials and packaging. Raw material cost is getting high, and they charge premium pricing for providing good quality products, so sometimes their prices get high. They have had to play around with prices, in some of the products they tried to increase prices but the PRICE ELASTICITY was not there. Most children are in the habit of bringing coins to the shop to purchase sweets and jellies, it is very difficult to increase prices. Price Collusion- They have to keep in account the competition. Sometimes, the competitors sit together and form a cartel to control the price in the industry, by discussing the prices. For example if three of the competitors are selling are Rs.2 and one is at Re.1, so the industry will face the less growth in the category. Previously they launched STARGUM at Re.1 in Karachi, & then re-launched at Rs. 2; it was a test marketing to see the perception of kids; kids got a perception that it has two flavors, and big in size so they afforded to pay Rs. 2. Retailers are still lifting Re.1 gums, so they face problems in increasing the prices.

PACKAGING STRATEGY The company takes months to develop the packaging, even at times more time than to develop the product itself. Research indicates that the kids now are more choosy when it comes the color and the graphic design. Box packaging was experimented in the local market and proved to be a good one, because after consumer research it was found that consumers rate the products available in box packaging as a very high one in terms of product quality. Consumer insights reveal that the boxes add value. CHILLI MILLI and ABC were launched in boxes of large of Rs. 10; to some extent it was a success.

PROMOTIONAL STRATEGY The main strategy in promotion is to Break the Clutter by showing Innovation. They advertise less on TV, only emphasis on CARTOON NETWORK CHANNEL to target kids, and they get maximum reach on this channel. Jingle based & animated ads to attract the target audience No emphasis on Print and Out of home advertisements MORE Focused towards BTL activities in school & Kids oriented events Karachiites visit EXPO EXHIBITION mostly; they get higher reach over there because of the less recreational places in Karachi. Inside school, they go for CANTEEN BRANDING by decorating the CANTEEN with their POS Material and buntings. ABC drawing competition was held in some schools, and gifts were distributed. Designed a Candy shop in malls like Park towers, Forum, Millennium mall

SALES PROMOTION STRATEGY Incentives; change over the years depending upon the market trends, but generally the company tries to stay ahead of its major competitor “Hilal” on this, and the product demand/quality helps as a considerable aid in this regard. The Incentives are of the following types: Brand based incentives Carton based incentives; e.g. providing incentives on sale of 1000 cartons per month Point-of-sale material are also distributed, to have a good relationship with retailers, and to attract the buyers.

DISTRIBUTION STRATEGY CANDYLAND started off with competing distribution system in the beginning since there were & still many unbranded confectionary items and their products along with them available to the market. The company believes in providing their product available to the customers in the highest quality. Enhancing the distribution stands for making the product available at all the possible convenience stores. Superstores are also not left out of the focus of attentions and availability is ensured there as well. Intensive distribution strategy is followed with much more emphasize on market penetration.

SUPPLY CHAIN STRATEGY The most important factor worth considering is the rising costs which effects almost every level of the supply chain. Raw materials-Local as well as imported Shipments and clearance issues on the port Boxes, packaging, wrappers Forecasting is a need of today to prove your survival for tomorrow. Production constraints- Uncertain sugar and regulations by the Government on excessive storage of stock of Sugar.

CANDYLAND has market share of 12-14% in the confectionary industry of Pakistan. Major chunk is in the hands of HILAL confectionary. The market for Confectionery in Pakistan increased between 2002-2007, growing at an average annual rate of 7.3%, as compared of 2002-2005 which was 8.5% growth. Jellies currently comprise just 15 to 20% of the total confectionary market. Standard grocers are the leading distribution channel, holding one- third of the confectionery market revenue. The remainder of the market displays a high degree of fragmentation. The domestic cottage industry itself holds a very big share of the market, with the huge number of small candy manufacturers with deep penetration in the smaller segments of the overall market. The production is not only meeting local demand but items are also being exported. The exports of sugar confectionery, chocolates have shown a rapid growth during the last 10 years. This sector has vast opportunities to expand export especially to Europe and Middle East.

STRENGTHS & WEAKNESS OF CANDYLAND STRENGTHS Export to international market Catering multiple categories Sub-brands have high awareness Consistent quality Constant Innovation The 10 rupee market, despite of being a slowly developing market is reaping good profit margins for the company. LEADER IN THE CATEGORY; for shelf spacing they are always welcomed Investment in extensive machinery WEAKNESS Facing tough competition in BUBBLE GUM segment

THREATS The industry is PRICE SENSITIVE as the majority of the consumers are Kids. Industry faces serious problems due to abrupt and tremendous increase in price of sugar & glucose which and are largely depended on the growth of agriculture sector and the government policies relating to regulation of prices of relevant agricultural commodities. Sea fright charges from Pakistan are higher compared to the neighboring countries like India. This affects confectionery export, as due to the freight cost becomes high and affects prices. POLITICAL SCENARIO is posing a threat to the company as one their distribution network in Quetta has been closed to the bad political conditions. Marshmallow have some problems in abroad due to Gelatin ingredient. Existing companies are increasing their product lines that can prove to be a threat in the coming years. Company like Cadbury is giving more discounts to retailers as compared to distributors due to which retailers prefer its products for sale. Some companies are competing on the basis of cost. Asian Foods also has a rich experience of supplying its premium quality confectionery products to international marketing companies under their prestigious brands. This allows the company to continually learn from global experiences of large corporation. Hilal is more focused on aggressive advertising Increased competition, especially from the small producers of low quality confectionery products in the informal sector who do not pay their taxes, indulge in counterfeit products and have minimum overhead costs.

OPPORTUNITIES With the devaluation of the local currency and an increased in the pegged US dollar, significant potential in venturing into export market. Studies have proved that during the recessionary phases, sales of Candies and chocolates is increasing in US, primarily because it is the only affordable Luxury over there. Per capita income is increasing with the growing size of the middle class population in the country. Pakistan is also importing substantial quantity of confectionery, chocolates including other food items. If production of quality products is increased and prices are lowered the import of these items may be curtailed to a reasonable level. Marshmallow is in introductory Fanty has a considerable potential being in the growth stage

FUTURE OBJECTIVE The Company must increase its market share from a current level of 12% to 25% in the next 3 years- Keeping into consideration the current world economic recession without bringing any substantial increment in the advertising spend and emphasizing more on reaching consumers in a cost effective manner. Keeping in account this objective & SWOT analysis in mind; we have proposed the following strategies for marketing mix.

PRODUCT STRATEGY Market Development into the “A” class audience as well- This will enhance the company’s profit margins and “Profit Per Unit” and in the long run it will help develop a better brand image into the eyes of the “A” class target audience. Potential Product Category- CANDYLAND should launch flavored cakes; as there are a lot of expensive & international branded cakes are available in the market, and only local competitor HILAL has hit this market. Line extension- Further extension in Marshmallows and lollipops to give tough competition . Product differentiation strategy- Further product innovation and formulation to meet health issues for e.g. vitamin-fortified calcium- and protein-fortified candies can be introduced.

PRODUCT STRATEGY Explore Product-type Product Market- Increased functionality of products, e.g., gum tooth whitening in gum segment While the consumers are becoming more health conscious; chewing gums and sugar-free products are emerging categories, which are showing high growth. This category can be exploited by launching sugar free gums, targeting adults. Mints and medicated sugar confectionery provide a convenient means of treating or relieving minor ailments like sore and dry throats. Others- With a very short life span a new brand of candy comes, enjoys its peak sale for 4 to 6 months and disappear, so the company should come up with more new flavors within a year as kids want something new every time. Withdrawal of some brands which are not doing well in the market. The company should take into account Nestle as a competitor to compete with the higher income class also.

SEGMENTATION & TARGETING STRATEGIES Focus on chocolates- by using USE SITUATION segmentation, and positioned in this way that their chocolate sales increase in happy moments and celebrations, Consumption around festivals is a crucial growth driver for chocolate, and with the disposable income growing, the chocolate market will be growing too, especially in metropolitan areas. There is a huge potential market for confectionery gifts, especially wedding confectionery, wedding confectionery sales are not bounded by seasonal factors. In Pakistan, the adult confectionery market is at a very nascent stage. However, it continues to be an untapped segment, so CANDYLAND can take advantage of this segment. Intense & more focused towards Rural Market- Competition is less intense in the rural market, which offers great potential, especially for mid-range products.

BRAND STRATEGY Re- Position whole CANDYLAND as a modern, funky & contemporary brand, as now teenagers & kids are more fashionable and up-to-date. Repositioning- Of “FANTY”; make it as a premium brand, as it has more potential to have growth. It can now targeted towards young and teenage girls and boys. Fanty has a considerable potential being in the growth stage as quoted by BM CANDYLAND, the reason being that people believe that the product has reached a state of maturity, whereas the company sees a lot of profits and a far longer life in the product. The main objective of the brand strategy should be to strengthen the brand equity of CANDYLAND in the minds of the consumers, so that in future when the company comes up with sub-brands so there would be high potential in their sales. Associate the brand with some famous cartoon identities, or other well-known personalities among kids and teens. Young consumers are more brand-conscious, so a lot of investment is needed to build different strong brands.

PROMOTIONAL STRATEGY To build up the brand name of CANDYLAND, the company should show the name of CANDYLAND after every advertisement on TV. BTL activities should be done with the name of CANDYLAND for achieving top of mind awareness of the parent company. Aggressive advertising in winters to take more share . The reason is that in winter children and teenagers are more inclined to have food more rich in starch/sugar; secondly confections remain safe from melting and de-shaping. During summer children switch to something that is cold like Ice cream / gola-ganda (flavored ice) due to hot weather; however, arrival of mango also affects children’s inclination towards sweets and candies. Teenagers use icons, SMS shorthand and text messaging, so to reach to them, CANDYLAND should SMS their ring tones, wallpapers of their favorite icons for better brand recall, and this can lead to word-of-mouth. The company should makeover its website using interactive element where kids can play games and puzzles.

PROMOTIONAL STRATEGY Improved database of schools and colleges to provide better networking with them to facilitate the very frequent BTL activities. More regular factory visits for the students should be arranged. Focus on specialty advertising such as pencils, key chains, mugs and others with the name of CANDYLAND imprinted on them. Gifts should be distributed in schools using random sampling buyers. Use sponsorship in different kids oriented programs like DAWN SPELLING BEE CONTEST. Keeping into consideration the concept of PESTER POWER , they should also emphasis on TV channels like WIKKID, NICKELODEON, programs like INDUS CHOTU for brand activation, & to increase their reach. In PRINT, they can go for print ads in YOUNG WORLD, NAUNEHAL etc. For promoting newly launched product like tooth-whitening gum or sugar free gum, they can built up a very positive social image and professionalism by launching a Dental Program promoting teeth-protection and awareness on campuses, in the community, and in hospitals.

SALES PROMOTION STRATEGY Better marketing and discount schemes will be necessary for effective competition in a market with increasing prices. For attracting kids, they can come up with BUY ONE GET ONE FREE scheme, or by airing a TV ad to attract kids to write a story on CANDYLAND; or drawing a imaginary candy land, and distribute gifts to the winners. In store demonstration at a number of convenience stores can be taken up on a considerable scale in order to encourage preference, e.g. by placing a TV advertisement in super markets using electronic point of sale. Special placements can be asked at a number of superstores. It can be done more effectively with the distributors help on the smaller size convenience store wherever possible. Attractive Counter displays in hyper markets and Kiryana stores to attract kids.

PACKAGING STRATEGY Packaging of hard boiled candies should be eye-catchy to make it more impulsive product. As the parents of kids are becoming increasingly health conscious due to the tooth problems so it is essential to display the health-oriented ingredients on packaging to have a positive image. SHELF LIFE (manufacturing & expiration dates) should be printed on packaging of chocolates, jellies etc. Packaging of brands should be registered as trademarks to avoid duplication and copying. Packaging should be compatible with the international products’ packaging. For example using fashionable packaging , consumer-friendly packaging encourages sales. smaller packaging of sugar confectionery for impulsive purchase and on-the-go consumption.

PRICING STRATEGY CANDYLAND should adopt MARKET SKIMMING where the product is highly priced and of highly quality. It should be done for the newly launched product. It can be done for adult segment, and for targeting class A market. Higher the price; higher will be the perceived quality in the minds of the consumers. To cater current target market, and the industry is price sensitive, the company should try to keep the prices lower, because The growth of the packaged food industry was slightly lower in 2008 than it was in 2007. The increases in price inflation have slowly affected the growth in sales. To retain customers and enhance the share of packaged food, manufacturers will have to slow the increase in their prices in the forecast period. In the case of confectionery, where the primary audience is children, the bipartite purchasing decision is a critical determinant of success. The bipartite decision is the process whereby children and parents 'negotiate' purchases that the child wants but the parent actually pays for. So keeping this point in view, the company can focus on low price in their advertisements particularly to bubble gums and toffees.

DISTRIBUTION STRATEGY Setup candy stores in MODERN TRADE Negotiating commissions and margins to install chillers/ mini fridges- This will certainly help CANDYLAND increase awareness about its growing line of chocolates, as this was noticed in a number of shops and stores that there were on an average 2 to 3 bars of NOW and PARADISE chocolates lying in the chillers of CADBURY. There should be mini KIOSKS in SINDBAD, FUNLAND etc. with the name of CANDYLAND. Coverage of gaming zone areas & summer camps especially in vacations, where kids can buy and mix candies of their own choice from jars. Major focus on exports- With rupee becoming weaker relative to the USD, the exports become stronger hence special emphasis must be laid on exports sector.

CONCLUSION As the market becomes more mature, product enhancement and product innovation have become the major growth drivers. Create enticing activities to generate customers at the place of activities, which build brand image, bring customer loyalty towards brand. Aggressive advertising needs to be done just like other brands, using max media marketing. CANDYLAND should find out consumer perceptions through continuous market surveys. More research should be done to tap the adult confectionary market. Create differentiation by breaking the conventional barrier in communication by using the approach not used before. Price used to be the major consideration for Pakistani consumers when they went shopping, but now more and more people consider value-for-money

Strategic Marketing &amp; Planning

More Related Content

What's hot

Similar to Strategic Marketing &amp; Planning

More from Nyssa Razzak

Strategic Marketing &amp; Planning

Strategic Marketing & Planning

Similar to Strategic Marketing & Planning

Strategic Marketing & Planning