Final Report Ferrero

8/9/2019 Final Report Ferrero

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EXECUTIVE SUMMARY

This study aims at the various wholesale loyalty programs being run by confectionery and

FMCG companies for their wholesalers and how these programs benefit the wholesalers.

Loyalty programmes as a term is well known in Indian retail industry be its hopper stop!s

"First Citi#en$ card or "%ayback card$& but it is a little known fact that loyalty programmes

are run on much higher scale by wholesalers in FMCG ' Confectionary Industry as well.

Initially the data was collected on the raw hand from various shops in the city so as to

compare the benefits associated with the ongoing programs but the ma(or support came in

from the distributors who take care of the supply of products and goods to the wholesalers.

There are certain factors that have predominantly worked towards enabling the

confectionery sector to grow in recent years. These include higher disposable incomes that

have enabled consumers to enhance their purchasing power& rapid urbani#ation that has led

to busy lifestyles and subse)uent inclination of consumers towards premium range of

confectionery and aggressive marketing campaigns by all the players to break the product

clutter and attract consumers through brand loyalty initiatives. In addition to these& the other

factors which are contributing towards the rapid growth of the industry include the growing

gifting culture within the country& fast e*panding retail network and developing rural sector.

+ith this data which was collected from the distributors and the wholesalers the detailed

analysis of various confectionery and FMCG companies program was done.

,n the basis of this collection few suggestions were forwarded to the company so as to

(ustify whether the loyalty program is beneficial for the Ferrero or not.


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INTRODUCTION TO TOPIC

The Indian Confectionery market is e*periencing rising demand due to various driving

factors which& in turn& have been instrumental in providing immense opportunities to

manufacturers to grow and operate in the market lucratively.

+herein chocolate confectionery en(oys more popularity in comparison to the others. The

report also gives an insight into further segmentation of these sub4markets. Moreover& the

chocolate confectionery segment is dominated by a large number of M-Cs and organi#ed

confectionery manufacturers. There are certain factors that have predominantly worked

towards enabling the confectionery sector to grow in recent years. These include higher

disposable incomes that have enabled consumers to enhance their purchasing power& rapid

urbani#ation that has led to busy lifestyles and subse)uent inclination of consumers

towards premium range of confectionery and aggressive marketing campaigns by all the

players to break the product clutter and attract consumers through brand loyalty initiatives.


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In addition to these& the other factors which are contributing towards the rapid growth of

the industry include the growing gifting culture within the country& fast e*panding retail

network and developing rural sector. This pro(ect help us analy#e various motivating

factors for a retailer to push particular brand in market.

INTRODUCTION TO INDIAN CONFECTIONARY MARKET

Indian confectionery industry is divided into organised and unorganised sector. ,rganised

confectionery industry is worth 0s.5666cr and it is estimated to grow at 78 per annum.

,verall industry has a turnover of 0s.9:66cr with a huge potential to grow. The sugar boiled

confectionery has got a ma(or share.

sugar boiled confec.; 68%mint,chewing gum; 11%

chocolate bar; 12%chocolate count; 9%

Category Distribution

/ large part of confectionery industry in India comprises of local subsidiaries of global

confectionery ma(ors like %erfetti& Lotte& Cadbury& +ringley!s etc. ,ne of the leading player

in Indian confectionery industry is Candico worth around 0s.;5:cr .It is the only company

which has production facilities overseas.


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Thesi#eofIndianconfectionerymarketisgrowingattherateof;:to

568annually.Thesi#eofIndianconfectionerymarketisgrowingattherateof;:to568annually./bout


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SNAPS"OT OF INDIAN C"OC#ATE INDUSTRY


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COMPANY OVERVIE$

Ferrero S%A is an Italian manufacturer of chocolate and other confectionery products. It

was founded by confectioner %ietro Ferrero in ;7>? in /lba& %iedmont & Italy .Today Ferrerois

the third largest confectionery company in the world and it is controlled by

%ietro'Giovanni Ferrero. Ferrero International /@s head)uarters is in Lu*embourg .

Its German factory is the largest of all and %as)uale Giorgio is its current C ,

It has ;? plants& 9A operating companies and around 5:&666 employees all over the world.

The Ferrero philosophy is based on few principlesB

3se only the highest )uality ingredients. e uni)ueD -ever copy anyone else. Manufacture with the most modern technology .
http://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Chocolatehttp://en.wikipedia.org/wiki/Confectionerhttp://en.wikipedia.org/wiki/Confectionerhttp://en.wikipedia.org/wiki/Pietro_Ferrerohttp://en.wikipedia.org/wiki/Alba,_Piedmonthttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Chocolatehttp://en.wikipedia.org/wiki/Confectionerhttp://en.wikipedia.org/wiki/Pietro_Ferrerohttp://en.wikipedia.org/wiki/Alba,_Piedmonthttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Luxembourghttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Italy


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MISSION

"i&' (ualit! & rafted %re ision &%rodu t fres'ness & areful sele tion of t'e finest ra)*aterials &res%e t and onsideration for our usto*ers B these are Ferrero!s "key words$and values which have helped make its confectionery well4known and loved by millions of consumers all over the world. Its products are the result of innovative ideas& and are thereforeoften inimitable& despite being widely distributed& and have become part of the collectivememory and customs of many countries& where they are often considered true cultural icons.

Ferrero also means caring about hygiene& the environment& social issues and the localcommunities where the company is present& as well as its own human resources.

Today many Ferrero products are "global$& in that they are sold everywhere. Ferrero is one of the largest confectionary groups in India.

2owever Ferrero!s distinguishing characteristic is that it is " &lo al+ ,t'in- &lo.all!/ a tlo all!0 & a company which is both global and local& which focuses on internationaldevelopment& without losing sight of its relationship with local communities.

T'e onsu*er is al)a!s at t'e entre of our strate&!1 Ferrero!s relationship with itsconsumers is based on longstanding and mutual trust& built up over the years with e*pertise&e*perience& understanding and intuition. This is a measure of Ferrero!s interest in consumer needs& and this is a key factor of the company!s success.


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Ferrero stepped in India in =ec&566? and is presently headed by Mr.0udolph e)ueira. It

has only launched a few products in India according to the taste of the people. The

products are

E NUTE##A B the world famous chocolate spread

E FERRERO ROC"ER B pralines combination of creamy milky chocolate&

whole roasted ha#elnut ' crispy wafer

E TIC TAC B small candies of different flavours

E KINDER 2OY Bchocolate snack egg with surprise toy inside.

These products are all in four different categories i.e. in premium chocolate& choco spread&

and mouth freshener.The whole Ferrero group closed 56;54;9 financial year with a

turnover of


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SCOPE IN INDIA

Ferrero finds scope in India due to increasing income4levels& changing lifestyle& manyfestivals. These and various otherfactors made the company set4up its manufacturing unit inMaharashtra. Indian confectionery market is e*panding like never beforeas the localsubsidiaries of global confectionery ma(ors like Cadbury& %erfetti Kan Melle& Lotte and+rigley!s are swinging in to action with new marketing strategies backed by investment tograb largest share of Indian confectionery market.

The Ferrero products are of premium )uality and its main target is middle high class people because of their purchasing power. o the products such as 0ocher and -utella are more

available in supermarkets& bakeries etc.

In India small shopkeepers play an important role in distribution of the product. o productssuch as Tic4Tac and Jinder oy are available in wholesale market. ut the competition is toomuch high as competitors are providing with discounts& gifts etc. i.e. wholesale loyalty

programme. o the best deal has to be given to the wholesalersso as to win over thecompetitors.

=uring the initial phase& the task was to understand the products of the Ferrero. The margins&schemes given to the wholesalers and retailers and the functioning of sales e*ecutives andsales officer. /nother task was to understand the distribution channels of the company and tomeet the distributors to understand their role.

For the schemes and margins help was taken from sales officer as he provided me withthe printouts and various other pamphlets so as toincrease my understanding of margins andschemes.

The main ob(ective was to study the loyalty programme of the competitors and other FMCGcompanies so I visited many wholesale shops and distribution points. The main hurdle tocollect the data was that it was difficult to get the proper literature about the programs asmany of the wholesalers do not have the catalogue related to the programs. /fter fre)uentvisits I was able to collect the catalogues of some companies and got information verballyabout them.


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PRODUCTS OF FERRERO

Ferrero Ro 'erT345


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Ferrero Ro 'er T367

Kinder 2o!


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Nutella


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Ti 3Ta ,Mint/Oran&e/Man&o/C'err!0

Mar-etin& Mi8

Produ t

Ferrero should offer products according to the tastes of Indian consumers. If these productscan be offered in different flavours that resemble different cuisines& it could be a great successin India. %eople celebrate many festivals and eat varieties of sweet dishes. o& chocolates canreplace sweets as the young generation would definitely like to try something new.

/lso& some high end products can be offered like they are being offered in urope becausehigh class people would take it as their status symbol and they want the superior )uality andtaste.

Pro*otion

For the promotion of Ferrero products in India different tools of promotions can be used likeadvertising& media& TK& radio& press& hoarding boards&eventsHroad shows & short messageservices& direct consumer& retailers and wholesalers.The Indian consumers are very much influenced by promotional activities so it should be

planned wisely. For e*ample& film stars and cricketers are very famous in India so they can beused as a tool of promotion.

Distri.ution


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These days small shops play an important role in the distribution of confectioneries in India.o& Ferrero should sell its products in both super markets as well as small shops. %erfetti& for

e*ample uses a network of small shops in selling its chewing gum and candies. LikewiseFerrero can also sell some of its products through small shops. imilarly& in order to increasethe volume of sales and revenue& middleman like wholesalers and retailers should be involved

by attracting them with good commission and other benefits. Transportation and storagearrangements can also be made for the smooth supply of products.

Pri e

The main competitors of Ferrero in India& Cadbury and -estle& have priced their productslower than Ferrero!s. o& it would be easy for Ferrero to compete with them if price can beslightly decreased.

%rice cannot be cut down sharply because nuts and other dry fruits as well as good )uality of cocoa has to be imported since these are not produced in India.

S$OT ANA#YSIS OF FERRERO ROC"ER


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Stren&t's

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O%%ortuni

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MAR9IN

Retailer $'olesalerTic Tac ;:8 Lilliput ;680ocher 568 Jinder oy ;68

-utella 568 -utella 7.:8:; *ar&in for distri.utors on ea ' ite*

SC"EMES

-utella4;:N;

TicTac4; standN;

0ocher4 ummer surprise4T9HO5 4save 0s ;;P4

T;?4save 0s A?P4

T5>4save 0s ;>;P4

$'olesale

Jinder (oy49 cases get ;8 cash discount

? cases get ; bo* free

;5 cases get 9 bo* free

Lilliput4; case gets 58 cash discount

9 cases get ; (ar free

: cases get 9 (ar free

Halso the coupon

PRICE DISTRI


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J3

T,CJIT

3nit %riceCase Kalue

0 T/IL0

3nit %riceCase Kalue

M0%

3nit %rice CaseKalue

0C4T9 97.57 9:.A9 >977.?A :: :5A60C4T;? 569.:< >66 59 >:6 ;A66 :>6 5;?60C4T96 975.A? >.95 >:A.99 :>77.7? ::6 ??66

-utella ;:>.


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VA#UE C"AIN OF NUTE##A


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MARKET ANA#YSIS

Most of the companies or new products try to step into the country from south India likeCadbury!s Lite from /ndhra %radesh and Tamil -adu. The Ferrero has started its distributionfrom Jerala because product is familiar to most of the people& purchasing capacity& highdemand of imported chocolates. Then the market has spread to other parts of the country.Many people from Jerala are settled abroad and they generally bring chocolates for their family and Ferrero 0ocher is one of them. ut now the 0ocher is available in their home

place so there is possibility of fre)uent buying by the customers. There can be more demandof 0ocher T5> in -orth India as compared to outh as there are many festivals& the trend of giving gifts is very common there.

In Maharashtra& places such as Mumbai& %une& -ashik& -agpur etc. are the key areas as it hasa huge population of 2igher Income Group families./lso&0ocher and -utellais aimed atupper middle class and high class people due to the higher prices. -ow most of the retailersare stocking global brands as their demand has increased immensely. In %une& many importedchocolates are available but the range of premium chocolates is very narrow. o there is ahuge scope in the market to establish as a premium chocolate brand which gives )uality

product.

The market of mouth fresheners is very wide. Generally& price of the product is less and it isaffordable by every segment and every class. -ot only in cities but also in small towns&interior areas etc. there is a huge demand of it.

y the observation it is found that every product of Cadbury!s is followed by its name so people are very much aware of the product under its umbrella. ,n the other side& very few people know that 0ocher& -utella& Tic Tac and Jinder oy are the products of Ferrero.


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COMPETITOR ASSESSMENT

There are few players in the premium chocolate category and Cadbury!s is considered as themarket leader. Cadbury!s is dominant player as it has a huge market share of around gm is for 0s.:5:P4 and >5: gm for 0s.>5:P4 for two different types.

/nother big competitor from the globe is Mars. Mars group has launched nickers in the

Indian market. The first TKC of this brand is made for India and made in India. It wants to position nickers as the chocolate which can be consumed for evening hunger. It is done sothat to come closer to Indian people. Mars also has M'M and ounty.

-estle which is not in the premium chocolate category has introduced Jit Jat Chuncky in/frican ChocQ and 2a#el -ut. It can be considered as a competitor but not a threat. /lsoJraft!s Food Toblerone&is a ma(or new entrant in the high end chocolate category.

Jinder oy can be considered as the uni)ue product targeting kids. -o other brands in themarket are like it. o it has a very clear advantage to grab the opportunity. The product has to

compete only with the price with is high from the customers view point.

In the mouth fresheners& the competition is high. Many established companies like+ringley!s& %erfetti etc. along with many local brands are penetrating into the segment. Thelocal brand adopts the similar shapes and packs and ultimately kills the demand for the

product. The case is same in -utella& the local brands also entered in this line but at last)uality matters so -utella emerges as )uality product and it has not got much competition.


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$"O#ESA#E PRACTICES

/s by the observation it is found that ma(or players of the confectionery industry such asCadbury& nestle& %erfetti etc. are continuing with simple practice of giving discounts on the

purchase. They are not following the whole sale loyalty programme and as it has become acommon thing in wholesale market. The discounts are as followsB

Cad.ur! 498 and additional 58 if in bulk.

Nestle 458

Perfetti 4;pkt free with 5 cases


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4

ut &if we see the wholesale practices by other companies such as 23L& %'G& 0eckittenkiser etc.& they have been growing at a fast pace and companies have gained much from

these programs. In detail they are as followsB

,a0"U#=s VI2ETA

2industan 3nilever Limited in order to reward their privileged wholesaler runs a program

which is known as RKI T/!.

0s.5:6P4 4;pt Hfor detergent and personal product

0s.;:6P4 4;ptHfor foods and products such as nail polish& lipstick etc.

For membership& purchase of the +holesalers should beB

%latinum40s.;&:6&666 and above

Gold40s.


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/part from the positive things there are certain limitations too. The company!s target which itgives to the wholesalers is not acceptable by them. The target continuously increases in everymonth and it generates pressure for wholesalers to attain the target.

Dis ontinuation of Me*.ers'i% B

+holesaler!s membership to the program may be discontinued ifB

;. +holesaler!s best of 9 )uarter average S minimum eligibility turnover.

5. / wholesaler voluntarily decides to opt outPresign from the %rogram.

SUMMARY OF T"E $"O#ESA#E PRO9RAM

2industan 3nilever Limited in order to reward there privileged wholesaler runs a programwhich is known as RKI T/!.

/ +holesaler can earn three types of points ase points& %ower %oints and Growth onus points. ase points are given on the purchase worth 0s 5:6P4& %ower points are given oncertain products which are mainly the high range products of 23L and the list of these

products changes every month whereas Growth onus points are given to the wholesaler if he is able to achieve more than his target sales for the )uarter. ; point is e)uivalent to 0s 5and at the time of redemption of the points the gift worth the amount of the points can be

picked up from the gifts store of 23L.

There are three Tiers in this program i.e. %latinum& Gold ' ilver which are defined by23L on the basis of year on year sales target for their wholesalers. If the wholesaler is ableto achieve more than what is re)uired from him in terms of the sales target then his tier can

be upgraded& this will be done on the basis of his last three )uarter results.

,.0P > 9=s $"O#ESA#E KA


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For every 0s.5:6P4 & ;pt will be awarded. In this programme there is a card system such as (ack card& )ueen card& badshah card. very card is known because of its respective targetssuch asB

For 4 *ont'/6? %ts34@a - ardFor *ont's/4?? %ts34(ueen ardFor *ont's/:?? %ts34*a'arani ard, onditions a%%l!0For *ont's/4??? %ts34 .ads'a' ard

ut the most important thing in this programme is that the value of one particular card willnot be mentioned to the wholesalers. This is done to avoid undercutting. If the+holesalersattain three or more badshah card then there will be all India level draw. =ouble

points are awarded to the products whose last two months sale has been down.

The e*ample of how this point system works is as followsB

uppose +holesalers has attainedB

; st month4>>9pts

5nd month45;6pts

9rd month49A;pts

Total 4;69>pts

In which& (ack card is 55N;6N;7 :;& )ueen card is ;6 and badshah card is 6;.

The value of each card is not mentioned to the +holesalers the company decides the value of each card say the value of ; (ack card be 0s.:6P4&;)ueen card be 0s.;:6P4 and ; badshah card

be 0s.;:66P4. o if no of cards is multiplied with respective value of the card&the result will beB

:;O:6 5::6P4

;6O;:6 ;:66P4

6;O;:66 ;:66P4

Total :::6P4

o the total amount will be deducted from the ne*t bill.


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, 0RECKITT to A feet above from the ground surface.

5 Minimum of 5O;.: feet Hlength ' breadth

9 Corner shelf would not be entertained

3one sided )indo)B

; hould be visible from outside of the shop

54 Minimum of 5O;.: feet Hlength ' breadth

9 It should be behind the cash counter.

9O#D MEM


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/part from these there are two kinds of point system i.e ase points and Champion bonus points.


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MET"ODO#O9Y

:14 REVIE$ OF #ITERATURE

Title3 2LL gives a boost to Channel Loyalty marketing

-ame of +ebsite4 httpBPPwww.afa)s.comP

Comment by4 =I0 MB Kivek asrur HManaging =irector

=ate4 > th March 56;>

/bstract4

=I0 M Marketing ervices %vt. Ltd& India@s leading direct and relationship marketingagency has been appointed by 2industan Lever H2LL as its outsource programmanagement agency to handle all aspects of its channel loyalty program& Ki(eta.Ki(eta is 2LL@s wholesaler loyalty program& which helps the company grow profitablerelationships with thousands of wholesalers across the country. It provides a platformfor interaction& to bring the wholesale customer and the company closer& helping themwork towards a shared vision.This program also allows wholesalers to accumulate points from their business withthe FMCG giant& and redeem them for e*clusive gifts and awards& in addition to arange of amenities and benefits. The program has been in operation for over a year&

and looking at its success there are plans to e*pand its scope in the coming months.

Comment4

Channel loyalty has& in recent times& emerged as a powerful tool for marketers. Thefundamental proposition on which such a program runs is that while most channelactivities are margin driven& if one can build real loyalty through a well designed

program& one maintains channel preference even in the face of competition moves
http://www.afaqs.com/http://www.afaqs.com/


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Title3 uper4Ma* launches new loyalty programme ! andhan!

Na*e of $e.site 4 httpBPPwww.indiainfoline.comP

Co**ent .! 4 ameer Jhan& -ational ales Manager4 uper4Ma* %ersonal Care %vt. Ltd

Date 4 9rd Feb& 56;>

A.stra t3

uper4Ma* %ersonal Care %vt. Ltd& one of the world!s leading manufacturers

of ra#or blades unveiled R /-=2/-!& their uni)ue loyalty programme for wholesalers ' channel partners. This initiative is aimed at maintaining andrewarding the relationship with their channel partners. R andhan!& ane*tensive loyalty programme intending to cover more than ;6&666wholesalers across the country includes even smallest of the wholesaleclusters& enabling uperma* reach not only the district head)uarters but eventhe farthest of talukas. This is the only on4the4spot redemption loyalty

programme by an FMCG company in the shaving category connectingthousands of wholesalers on the same platform.+holesalers and Channel partners are invited to five star properties in their respective cities for an afternoon of gratification and redemption of loyalty

points at andhan Melas. uperMa* has partnered with brands like Gitan(ali&a(a(& 2onda & TK etc and products from these can be purchased using theandhan loyalty points. andhan Melas have already been conducted across

various cities such as Mumbai& =elhi& Chennai& /hmedabad& aipur& Lucknow&Jolkata and have seen huge turnouts.

Co**ent3

andhan is one of the most successful wholesalers loyalty programme runningacross FMCG companies in India. For us our channel partners are veryimportant and andhan gives us the opportunity to share our success and (oywith the wholesalers and channel partners. andhan is a platform that providesa systematic approach of distribution and also assists immensely during new

product launches& visibility drives and in receiving real time feedback from thetrade.$ 4Launched in ;7A?& uper4Ma* has grown from strength to strength and istoday one of the leading brands in the personal grooming category worldwide.

uper4Ma* offers an e*haustive range of personal care products which cater to

all segments of the market.
http://www.indiainfoline.com/http://www.indiainfoline.com/


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Title3 trategy of selling premium products in niche areas helps Ferrero double salesNa*e of $e.site 4 htt'- articles.economictimes.indiatimes.com

Co**ent .! 4 agar Malviya

Date 4 59rd /pril&56;>

/bstract4

Ferrero India posted a ?A8 rise in sales at :


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/ decade later& the company has over 5&666 employees working at its aramatifactory in Maharashtra& and Indians now form the third largest workforce bynationality after Italians and Germans for its parent company.

:16 I*%ortan e of t'e Stud!

:1 O


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=oes a brand!s sales actually increase by such loyalty programmes=o retailers get motivated by cash discounts or gifts.

Resear ' Met'odolo&!

The pro(ect involves the analysis of the wholesale programme and distribution channels of confectionery industry and other FMCG industry in Mumbai and various programs offered bythem to tap market. /lso to find the various margins and benefits given by the competitors ontheir products in these programs.

SUMMARY OF RESEARC" MET"ODO#O9YB

0esearch /pproach urvey

ource %rimary =ata and econdary =ata

Collection Method =irect ,bservations& %ersonal Interview.

0esearch Instrument %ersonal Interview.

ample 3nit +holesalers and =istributors.

ample i#e 9: hops ' : =istributors


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DATA ANA#YSIS > INTERPRETATION

yes; 1""%

Participation in Wholesalers Loyalty program

/or gifts; 1""%

Reason for participation


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INFERENCEB /ll the wholesalers participate in loyalty programme for the gifts. There is noother reason to participate in the programme.

u'to 2 la h; 26%

2() la h; 29%

)(9 la h; 26%

abo$e 9 la h; 19%

Monthly sales of HUL

INFERENCEB It is found that there is an even distribution in different ranges in 23L.

ut in the case of Colgate and %'G & the monthly sales comes around 0s.68 are below the range.

marginal; 68%

no change; !2%

Increment in sales


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INFERENCEB ?A8 of the +holesalers had marginal increase in their sales and they believethat its not because of the loyalty programme but because of the demand of the products. /ndrest 958 believe their sales are same as before.

4

cash; 1""%

Preference in return

INFERENCEB /ll the +holesalers prefer to get cash in return instead of gift items. They

like to have options between cash and cash discount. -one of the +holesalers is interested ingetting gift items.


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RESU#TS > FINDIN9SB

; y directly interacting with the +holesalers it was found that Loyalty programme don!thave much impact on the sales. If& every home uses 23L products& so even if Loyalty%rogram is there or not the sale of the particular product will be as usual. ven in the case of the other companies also there is not much change in the sale. ut it is accepted that marginalincrease is noted but those figures do not motivate the +holesalers in any sense.

/part from sales it definitely brings stability in distribution i.e. now the prices and marginsare same in every area but before it was not like that.

5 econd observation is that&it increases pressure on the wholesalers.The target increases by558 for the ne*t month for 23L. /nd the delivery of gifts and gold coins is too late that it

becomes useless to participate in the 23L!s loyalty programme. o& altogether there was anegative impression for the 23L L%.

9 ut in the case of %'G it is found that +holesalers are )uite happy from their distribution&loyalty programme and their response to them. It is (ust because it is giving what +holesalers

want on proper time.


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SU99ESTIONS RECOMENDATION

It was found that for implementing the loyalty programme the company needs ranges in the product i.e. they need back4up.If the season is not appropriate for the particular product the+holesalers will not be able to purchase it so this loss can be recovered by other product.

For the company like Ferrero who has only two products Jinder (oy and Tic Tac for thewholesale. My personal e*perience is that in the summers there was a shortage of products and let suppose company was running loyalty programme so the products will not be there todeliver to the +holesalers and the programme will turn to be a complete failure.

o it proved that there is a need of product range for the loyalty programme to back4up thesales.

40 o it is recommended that it is not advisable for the company to start the + loyalty programme as it has no back4up products. /part from this the company can start givingdiscounts on bills according to the point system in every 9 months. ut this has to be (udged

by the company very closely.

uppose 0s.566P4 ;run

If the + achieves :6 runs and the value of this run will not be mentioned to the + butcompany will multiply that value will the run and will give the bill discounts to the + andrespectively for


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60It is also advisable to focus more on uper Kalue hopsH K as the products are of genuine )uality and the target is middle4high class people. The company can give discountsin the bill for the visibility also because in these shops visibility factor can affectsalesdrastically. %roper merchandising will definitely help to increase the sales to a higher e*tent.

Tar&et *ar-et

3rban middle4high class people should be targeted because of the purchasing power this population possesses. These people know about different brands and are demand a superior product. Moreover& they have a sense of taste as well and they would like to use Ferrero products as a status symbol on different occasions like Kalentine!s =ay& Mother!s =ay&0aksha andhan& 2oli& =eewali and many more.

The rural population should not be targeted because in India ma(ority of population below poverty line live in rural areas. 3ntil the price of Ferrero products goes down after a decreasein import duties& it is )uite risky to target rural population because the main competitors of Ferrero& Cadbury and -estle& have a good distribution network in rural areas and the price of their product is less than that of Ferrero!s. o& without brand awareness consumers in ruralareas is more likely to choose a product of lower price.

Positionin&

Ferrero has launched > different products in Indian confectionery market. /ll these productsare uni)ue in their own category and should speak the differentiation and benefits in theminds of the costumers.

Ferrero 0ocher should be positioned as a high )uality creamy milky chocolate mi*edwith ha#el nuts and crispy wafer.

-utella should be positioned as a rich and real chocolate spread. Tic Tac should be positioned as a uni)ue mouth freshener and mood booster. Jinder oy should be positioned as a surprise gift for kids that contains chocolate

inside an egg like shell.


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CONC#USION

/s mentioned above& product like Tic Tac can be the market leader as it has high demand. ofor this small shopkeepers play a ma(or role. It is aware that +holesalers should be targeted.If above mentioned plan is implemented then there can be increase in the sale and the productwill reach in every corner.

/nother important thing is that& people must be aware of the product very clearly. This can bedone by ads& displays& proper merchandising so that product should be in their mind. /s thereare number of competitors in the market so the availability of the product is the ma(or consideration as& if the product is not available in the market so it is very obvious that

customers can switch to other product.

/s far as the observations and findings& the Ferrero has taken a place in %une!s market. ut inthe chocolate category Cadbury!s is the leader& but if we see premium chocolates 0ocher is

playing an important part& the only thing where it lacks is unawareness and the high price. ofor this& if offers are given it should reach to the customers at the right time


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ANNEXURE

I1 UESTIONNAIRE

$"O#ESA#E #OYA#TY PRO9RAMME

hop nameHwholesale B

-ame of the ownerB

; =o you participate in any kind of loyalty P customer programmes run by companiesW

a 1es b -o

5 If yes& why do you participateW

a I get to buy gift of my own choice with the accumulated points in the end

b It is more beneficiary& because instead of passing the additional scheme money to retailer itgets accumulated.

c 0ate issues are not there in the market.

d ,thers

9 +hich all loyalty programmes you are participatingW

a 23L b %'G c Colgate d ,ther

> +hat will be the average monthly turnover of companies you participate in Loyalty programmeW

a 23L...................

b %' G.................

c Colgate..............d ,ther..................


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: =o you think this programme motivates you to go for achieving targets and giftsW

a 1es b -o

? =o you think your sale has increased after you (oined the loyalty programmeW

a 1es b -o

If yes&

2ow much 8 W......................

< +hat is the best thing in 23L programmeW........................................

+hat is that you don!t like in itW..............................

A +hat is good in Colgate programmeW XXXXXXXXX

+hat you don!t like in itW XXXXXXXXXXXX..

7 +hich one do you prefer in return from the loyalty programmeW

a Gift items

b Cash

c Cash discount in bills

d ,ther

;6 /ny suggestion to improve the loyalty programmeW


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II1 UESTIONNAIRE FOR T"E STOCKIST

The process was the part of survey as I was told by the company. y doing this company will be knowing the performance of the distributorPstockist and how well they are working indistributing the products. o the )uestionnaire was prepared open ended to e*tract muchinformation from them.

; 2ow many beats are you coveringW

5 +hat are the vacant areasW

9 +hat are the products are you handling other than FerreroW

> 2ow many vehicles and salesman do you haveW

: +hat is the fre)uency to visit the wholesalers and retailersW

? =o you visit personallyW

< +hat is the wholesalers contribution of your agencyW

Documents

Final Report Ferrero