STRATEGIC MARKETING MINT CONFECTIONARY INDUSTRY (CANDIES) EXECUTIVE SUMMARY

Product Category : Mint Confectionery (Candies)

Definition: A mint is a sweet candy characterized by the presence of mint flavoring or real mint oil, whether it be peppermint oil, spearmintoil, or another natural or artificial source; the sweets are often referred to as "peppermints". It is possible to obtain these sweets in a sugar-free version. Wintergreen and other oils or flavors are also frequently used in mints; however, these are not of the mint (Mentha) family or botanical group.

Sugar Confectionary

Ch oc lat es

Mint Confectionary

Why this product category: This is a product category which is used by all age group (mostly kids) and which is low end product still is one of the fastest growing category in the market. The is the category by which we came across daily in one or other way. Confectionery market in India The Indian confectionery market is one of the fast growing markets in the processed foods sector. Growing at a rate of 8% in 2010 the market size of the Indian Confectionery Market was Rs. 41 billion with a volume turnover of about 223500 tonne per annum. The category is largely consumed in urban areas with a 73% skew to urban markets and a 27% to rural markets.

Confectionery primarily made out of sugar is consumed by individuals of all age and regions. The industry in India is approximately divided into: Chocolates, Hard-boiled candies, Eclairs & toffees, Chewing gums, Lollipops, Bubble gum, Mints and lozenges. The major players in this segment are Nutrine, Nestle, Cadbury, Lotte, Perfetti Van Melle.

The confectionery industry in India

Metric Market Value at End of period 2004-09 2009-14 $1.27 B $2.28

0
RURAL
URBAN

0
500

Growth Rate (CAGR)

10.5%

12.4%
50

Market Distribution

47

48

52

450 400

44.2
29
Chocolate Sugar Confectionary

45 40

350
300

27.2

35
30 25 20 15 10 5 0

250 200 150 100

28.6
20

24
Gum

32
68
ORGANIZED

8
6

50 0

Market Size (in million US $) New Product Launches Volumes

Points to emphasize from graph: 1.) High growth in chocolates due to increase in income , urbanization , aspirations , and trend of gifting. 2.) High brand awareness / low switching / better margins / high involvement in chocolates. Difficult for someone to enter. 3.) High Brand awareness / frequent switching / low margins / moderate involvement in Gum. Difficult to enter as people experiment within existing brands.

4.) low brand awareness / almost no loyalty , low margins , low involvement in Sugar Confectionary (more in SWOT ). High volumes here. Much action taking place ( which is interesting as existing products are easily displaceable unlike other categories). 5.) A very high correlation between volumes and launches (for all categories) means everyone is trying hard to establish themselves as volumes leader , maybe to capitalize their new-found positions later.

Sugar confectionery
44 18
5 18
Fruit / Hard boiled Eclairs Mints Toffees Digestives / Herbal Cough Lozenges

51

$400m , 6% CAGR Highly fragmented market Strong regional players Important ones :
Perfetti Van Mille , ITC , Parle ,

Parrys , Nestle , Nutrine , Ravalgaon , Dabur etc

32%

24%

16%
7% 8% 13%
Perfetti Parry's Ravalgaon Parle Nestl Other

Low involvement Low brand awareness High switching Low price-point (Rs 0.5 / 1) High volumes Threat from unorganized sector Impulse buying Needs good distribution

The confectionery market in India is expected to continue to grow at healthy rates. Sugar confectionery will remain the largest segment, and new products like mints, lollipops and chewing gum, as well as boxed assortments will grow at the fastest rates. The confectionery market of India includes sugar boiled confectionery, hard-boiled candies, toffees and other sugar-based candies. Sugar boiled confectionery had penetrated an estimated 15% of the households only further suggesting a large potential for growth. Considering the 22% penetration in the urban market, the confectionery industry could hope to be in for great times.

Mint confectionery industry in India

NEW ENTRANTS
Imports allowed after 2002 Low CapEx Many new players Cross-segment play

SUPPLIERS
Increasing costs Expensive sugar replacement High packaging cost High distribution cost

EXISTING FIRMS
Intense Competition Similar proposition Volumes leadership Distribution battles High marketing expenditure

BUYERS

Low brand awareness High switching Low involvement Fixed price-point

SUBSTITUTES
Sugar free Chewing gums After-smoke products Teeth whiteners Mouth fresheners

The mint market is now witnessing lot of competition. The market is dominated by Nestle's Polo which commands around 80% share. The other players include the brand Chlorets from Warner Lambert and the brands in the gum category like Happy Dent. In India the annual per capita consumption of branded confectionery is still under 100 gms. Hard-boiled candy is reserved for the small-scale sector. There are about 5,000 units catering to the local markets. The big players have used a mix of franchise arrangements (with small units) and product formulations to get out of the reservation mode. The total contribution of the sugar boiled confectionery market in the organized sector, comprise plain, hard-boiled candies, toffees, clairs and gums is around Rs. 20 billion. Add to this the unorganized sector and the market for all types of confectionery is Rs. 50 billion. However, in terms of value the organized sector commands 60% of the market share. With the exit of MNCs and other established organized players from very low priced (25 paise) category, the unorganized sector has grown very fast. MNCs and high-powered advertising support substitute products like chewing and bubble gums. With Rs 3,250

million market share, the gum and mint market is growing at a rate 10 to 15% annually. Fruit and mint rolls being marketed by companies with sound strategies are going ahead rapidly. Chewing gums and mints are a preferred worldwide with the new-style-living, but in India, the category did not boost for quite a while. It has now caught on: from Rs 500 million to Rs 3000 million in just three years and is currently placed at Rs 3,500 million. It must be due to product quality and effective marketing - which includes brand equity. In chewing gum, Perfetti leads, followed by Warner Lambert and then Wrigley's, which came late and has a distribution alliance with Parry's. In bubble gum, Perfetti leads with Big Babool, followed by GDC's Boomer. Italian parent Perfetti entered the country in 1994. Agrolimen of Spain followed it, which is a 51:49 joint venture between General de Confiteria and Dabur India. Dabur has since withdrawn from the joint venture; General de Confiteria launched bubble gum with the brand, Boomer, which is targeted at kids for sale. Perfetti also introduced three products, Center Fresh, Big Babool and Brooklyn, with designed segmentation: Center Fresh, available in three flavours, targeting the entire market; Big Babool targeted at children in the age-group upto 5 years; Brooklyn, a stick chewing gum, meant for the teenagers. Warner Lambert has reinforced its interest, which launched Clorets chewing gum positioned as a mouth freshner while Chiclets is targeted at teenagers.

Brand Analysis
Chlor-mint Chlor-mint was launched in the year 1997 in the Health care category as an Ayurvedic Proprietary Medicine/Range which contained Herbasol that helped breath freshness. The brand has been refreshed from time to time with launch of variants like Chlormint Ice which was a strong mint and Freshfills, a unique liquid-filled mint offering in the Health Care category. Though this was a seemingly mundane product proposition, the brand was built around the platform of 'anytime freshness' meaning as and when required rather than being occasion specific. While competitors stressed only on relief from irritation in the throat or on masking bad breath, the dosage was not being highlighted, while in Chlor-mint with herbasol which is

an Ayurvedic Proprietary Medicine/Range, additionally dosage was being highlighted such as "anytime, anywhere meaning as and when required consumption." This positioning was reflected in the iconic "Dobara Mat Poochna" tagline in successive television commercials. The ads for Chlormint reflect a distinct attitude and push the boundaries of what is "acceptable advertising." The brand has built a unique place for itself in the consumer's mind, so much so that 'Dobara Mat Poochna' is part of everyday parlance meaning as and when required among youth. In order to widen the appeal of the brand, Salman Khan was chosen as the brand ambassador in 2009. Halls Halls was first launched in India in 1968 and soon established itself as a therapeutic candy competing in the cough lozenge market. Halls came into the Cadbury fold in 2003 as part of a global merger with Adams Confectionery. Halls has had a colorful advertising history in India and was in fact, one of the earliest brands to advertise on television in India. In the 1980s, ads featuring Meenakshi Sheshadri and later, Vijeta Pandit on its unique vapour action formula with a classic Halls Jingle were aired which established the brand firmly in the market. In the 90s, Halls advertising adopted a different take with its Traffic Jam advertising where Halls restores order to a situation of chaos. The early 2000s saw Halls advertising on the refreshment platform. Over the years Halls has been strongly positioned on the `soothes sore throat benefit in the consumers mind. Halls continues to be one of the leading mint brands in India even in the changed competitive context. Halls is the brand name of a popular mentholated cough drop. Halls cough drops (categorized as a cough suppressant/oral anaesthetic by the manufacturer) are sold by the Cadbury-Adams Division of Cadbury plc and have long been advertised as featuring "Vapor Action". Halls was first made in the 1930s in Britain by the Halls Brothers company (founded 1893). Halls Brothers was acquired by Warner-Lambert in 1964. When Pfizer acquired Warner-Lambert in 2000, the Halls brand came with the entire Adams portfolio (which included Trident gum, Dentyne, Chiclets and Freshen Up, among others). Two years later, Adams was bought out by the Hall family, the company that currently owns the Halls brand worldwide. was bought out by the Hall family, the company that currently owns the Halls brand worldwide. The Halls Defense line consists of flavorings containing Vitamin C but do not contain menthol and suppress coughs. Halls Fruit Breezers, launched as a non-mentholated lozenge, comes in many flavors such as: Cool Berry, Cool Creamy Orange, Cool Creamy Strawberry, Tropical Chill, and Cool Citrus Blend.Halls also produces a sugar free line of mentholated cough drops.In some parts of the world, including Brazil[2], Argentina, Peru, Colombia[3] , Philippines, and Pakistan. Halls is advertised as a mentholated hard candy and is not recognized as a medicine for coughs. In the UK, Halls Extra Strong has recently dropped all mention of an active ingredient (or of coughs) from the packaging, which now describes the contents as "Extra Strong Original flavour hard boiled sweets."

'mint-o' and 'Candyman'. ITC currently has two brands in the confectionery segment - 'mint-o' and 'Candyman'. 'mint-o' was acquired by ITC from Candico in March 2002. ITC re-launched the compressed mint offering, across all major markets in India, with new and improved product and packaging. It is available in mint flavour with added blue specks to enhance consumer experience. mint-o Cool Blue - a single mint in a pillow-pack was launched In November 2007. 'mint-o' is available in 3 sizes rolls of 20 and 6 and singles, capturing the international essence of youthful cool. ITC launched 'mint-o Fresh' in October 2004. An active mint deposited candy, mint-o Fresh is available in a refreshing mint flavour - mint-o Fresh Eucalyptus. Its launch extended the footprint of the 'mint-o' brand in line with the strategy of adding excitement and contributing to the growth of the confectionery category. 'mint-o Fresh' is especially targeted at the adult consumer creating a basket of mint-based products across price points. The latest offering in the adult mint confectionery segment is mint-o GOL, in the 'Chews' sub-segment. A brand for young adults, mint-o GOL appeals to both men and women, offering a never before "refreshing indulgence". Recently, a Green Mango variant of mint-o Gol was launched which has been well received by consumers. The latest punch of mint from Mint-o mint-o Strong Power Mint! has been launched to strengthen the cough lozenges portfolio of ITC. The response to this transparent mint with blue speckles, icy compounds and double dose of eucalyptus, menthol oil has been very encouraging. Tic Tac Tic Tac , the mint confectionery brand from the Ferrero group has gone for a new positioning. The brand has changed its positioning from " Conversation Starter " to a " Refreshment that needs to be Shared ".The brand had gone for a similar repositioning in 2008 when it adopted the tagline " The New Hello ". The brand was then positioned as an " icebreaker" or " Conversation Starter". The brand after two years is embarking on a new communication route. Tic Tac is a unique brand. The shape, taste and packaging sets this brand apart from the rest of the mint-based confectionery brand. The brand has also gained good penetration interms of distribution. The uniqueness of the brand has poised certain positioning issues for the marketer. Since the brand is different from the conventional mint-based products, the positioning should also reflect the uniqueness. Polo is a brand that has used its unique form to its advantage by its positioning based on the " Hole " factor. Tic Tac ideally should have discovered some smart way of communicating its uniqueness. But so far it failed to do so. Tic Tac so far has not able to find a differentiated communication platform that reflected the uniqueness of the brand. That is the reason why this brand failed to came out with any clutterbreaking campaigns.

The current campaign and the positioning is no better. Infact it is worse than the earlier proposition of "The New Hello ".

Polo: Mint With A Hole Polo is the market leader in the mint candy category in India. This is a brand that has created lot of excitement in the market with its smart advertising and promotion. The history of Polo dates back to 1725 when Rowntree opened a tea and coffee shop in York. In 1948, they began selling Polo Mint candy. The company changed hands and in 1988 Nestle bought the company over. Polo was launched in India in 1994. Polo comes under the Adult confectionery market which is estimated to be around 1100 crores. Polo is the market leader in the mint based lozenges category. Polo is famous for its positioning as a "Mint with a Hole" which created lot of excitement for the brand. The campaigns portrayed the unique shape as a differentiating factor. The campaign was humorous and the product gained instant market. The category is now facing lot of competition. Big players like ITC and Perfetti is eyeing this category seriously. ITC have acquired MintO from candico in 2002 and aggressively promoting the brand with the positioning "unusually Cool". Candico earlier pitted MintO as a Mint without a hole thus challenging Polo headon. Then ITC repositioned Minto as a cool brand. There are other players like Chlor-Mint getting aggressive in this market. Nestle recently have done away with its successful positioning based on the Hole. The brand changed the agency to Lowe. The current campaign talks about the cosmetic benefit and value addition. The ads talks about whistling while eating Polo with the baseline " Polo ghao seethi bajao" which does not create any meaningful impact on the TG.

Advertisement Analysis

1. Chlormint Chlor-mint with herbasol which is an Ayurvedic Proprietary Medicine/Range, additionally dosage was being highlighted such as "anytime, anywhere meaning as and when required consumption." This positioning was reflected in the iconic "Dobara Mat Poochna" tagline in successive television commercials. The ads for Chlormint reflect a distinct attitude and push the boundaries of what is "acceptable advertising." The brand has built a unique place for itself in the consumer's mind, so much so that 'Dobara Mat Poochna' is part of everyday parlance meaning as and when required among youth. In order to widen the appeal of the brand, Salman Khan was chosen as the brand ambassador in 2009. The brand has changed its positioning from the earlier One does not need a reason for having Chlormint to " Anytime Consumption". The brand owners want to expand the scope of the brand. Dobara mat puchna ad campaign clearly communicates the positioning message of chlormint which means to be anytime consumption.

2. Mentos Mentos is a huge consumer product in India, where its widespread sales have led to massive Mentos production within the country. But the way Mentos has exposed themselves in society has NOTHING to do with their real product. The company has created advertisements where after eating a Mentos, you will become smarter. There was one particular advertisement in where a man/ape was working for a Donkey. After eating that Mentos, the man/ape runs away and eventually comes back to make the Donkey work for him! Now its a catchy advertisement and we always laughed to it, but the last line in the ad says "Dimag Ki Batti Jala De" which in English means "Use Your Brains". What does "using your brains" have anything to do with the Mentos? Obviously the company is using the ad to lure people into buying their product, but the advertisement has nothing to do with the Mentos itself. Mentos is meant to eat for pleasure and clearing your breath, not meant to make you smarter. World wide Mentos is positioned on the freshness platform, the baseline being The Freshmaker .Here in India, initially the brand was launched in the freshness platform but later the brand has slightly extended the global positioning from Freshmaker to Smart thinking. The baseline Dimag ki Batti Jala De has been an instant hit with the target audience. 3. Minto fresh In Mintofresh advertising they tried to depict ultimate social leveller. The ad creates a unique blend from Laila-Majnu tragedy (albeit this is not), rural amorous aspirations and the forward looking lad from mera gaon mera desh. The message is not hidden behind incoherent syllogism but a simple message: 'Laila ko jab karna thha impress majnu ne khayi minto fresh, bole to ekdum fresh'. The end shows reversal of the fairytale of Frog Prince with the villain turning back to his frog-dom . Mintofresh has been positioned as a fresher breath, which helps you in impressing others. This is basically, targeting toward youth who are conscious about their breath, typically smokers. 4. Polo The current advertisement campaign for polo talks about the cosmetic benefit and value addition. The ads talks about whistling while eating Polo with the baseline Polo ghao seethi bajao" which does not create any meaningful impact on the TG. Another Ad campaign for polo with the tag line Are you a sucker or cruncher? .this will help the company interacting with the consumers. This campaign have designed to focus on emotional reasons for buying the brand by re-establishing its quirky, fun and playful personality, rather than more rational thought processes, such as a need for fresh breath, which dominates mint advertising. Polo is famous for its positioning as a "Mint with a Hole" which created lot of excitement for the brand. The campaigns portrayed the unique shape as a differentiating factor. The campaigns were humorous and the product gained instant market.

5. Halls 1 Halls Airplane Ad: Personally we did not like the ad because the action of the person who took Halls was contradicting the Coolness " factor promoted by the brand. But the hyperbole or the exaggeration worked to brand's advantage. The brand was able to clearly communicate its core brand promise to the consumer. 2. Halls Polar Bear ad: It is again Hyperbole at its height. The message is spot-on and the exaggeration works well to reinforce the core positioning of the brand. The brand has the tagline " Thandi Saans Ka Blast " which communicates its coolness promise. While most of the throat lozenges products are sold on medicinal platform, Halls wanted to differentiate itself. Hence the brand chose to position itself on the Cool and Refreshing Platform. But instead of focusing and establishing this platform, the brand kept oscillating between medicinal throat relief and Refreshing" platforms. If you look at the series of ads of Halls across its lifetime, the brand was confused about its core brand value. In one ad, the brand will be concentrating on Sore Throat while in another it is taking about refreshing breath. It was in 2008 that Halls finally decided to focus on the Cool throat " platform. The brand used hyperbole to communicate this message to the consumer.

Positioning Strategy :
Stick to the humorous advertisements since it is a low involvement product and requires brand recall. Target smokers by putting counter in smoking lounges. Target youngsters by promoting fresh breath and doing promotional campaigns during college fests.