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PGDM 2016-2018
FIRST

Prof. SANDEEP PURI

MARKET ANALYSIS OF PERFETTI VAN MELLE I
ORIGINAL
TWELVE
8827229975 k.pranav2223@gmail.com

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INTRODUCTION
Perfetti van melle is an Italian company, which made it`s entry into
the Indian confectionary market with centre fresh in 1994, followed

by numerous other brands as Big babol, Alpenliebe, Centre Fruit,

Mentos and many more.

MARKET SHARE AND SIZE

Globally, Perfetti is the world`s third largest player in confectionary
market with its nearness in more than 150 nations around the world.
In India, Perfetti has a strong market share of slightly more than 25%
in the indian confectionary market with an annual turnover of
3000cr INR . In a highly competitive market of confectionary gums
where prices are highly subsidised as low as 50 paisa, PVMI has 3 of
it`s products having an annual turnover of INR 1 billion each namely
Big Babol, Center fresh and Alpenliebe. PVMI sells more than 15
different products spanned across various segments namely
candies, gums and chews through a wide network of retail channels
across the nation.

COMPETITORS & PRODUCT PORTFOLIO

With an eye catching tagline of caring for excellence, the company

sells various popular subsidised brands as Alpenliebe, Big Babol,
Mentos, Chloromint, Happy Dent and many more.
It faces stiff competition from other recognized brands some of
which are:1.Cadbury-Gems, Cadbury-Halls, Cadbury Eclairs
2. Nestle Polo
3. ITC Mint-o-fresh
4.Parle-kismi, Parle-Poppins, Parle-Melody.

PORTER 5 FORCE ANALYSIS

Competitive Rivalry :
1. The market is highly competitive as there is threat of
international players in markets relating to high class
consumers whereas there is a threat of domestic low level
players in sub urban and rural areas.
2. There is not much difference in quality of the competing
products.
3. Other differences include variety in flavours, difference in
packaging, difference in segmentational targeting etc.
4. Switching cost for the consumer is not significant as the price
points of different competing products in the sugar
confectionary market is fixed and highly subsidised.
5.

Consumer loyality is very low as it is unlikely for a consumer

to go looking for a specific product at multiple retailers. Due to
availability of numerous similar products, key factor for sale
lies in product visibility in retailer shops.

Threat of new entrants:

1. Threat of new entrants is high in the market particularly in sub
urban and rural areas as the consumer base is primarily
concerned with the taste and price of the product and does not
give much attention to brand name or to the hygiene and
health issues associated with such products.
2. In the urban areas, any entrant with a higher margin of profit
for the retailers is a potential threat as it will affect the sale
volume of our products.
3.

SWOT ANALYSIS OF PVMI

Strengths:1.PVM has a widespread and strong distribution network of retailers.
2.High and trusted quality of products has yielded a strong brand
value of PVMI among the consumers.
3.Being the third largest confectionary company in the world, it has
a strong global presence in around 150 countries.
4.Attractive packing and proper advertising with effective marketing
strategies has firmly rooted the presence of products of PVMI among
the target consumers, which are mostly children.

Weaknesses:1.Majority of the consumers are children and thus the consumer

base of the company is not diverse.
2.Subsidised pricing of the products primarily targets middle and low
class consumers and thus makes it difficult to pitch for high class
consumers.

Opportunities:1.Diversifying the product with introduction of new flavours to

expand the target market. Here the company could aim at
introducing flavours which appeal to elders as well.
2.India being an emerging market, there is immense market and
growth potential for PVMI to use it`s pre-established brand name for
penetrating into new segments like chocolates, biscuits, flavoured
drinks etc.
3.PVMI could launch products which appeal not only to taste but are
also beneficial for health of the customers. For example, digestive
candy market is largely occupied by Dabur Hajmola(market share)
and which could be a potential segment for investment.
4.Reaching out to low end retailers in the rural areas.

Threats:1.Hygeine and health issues among parents who are not willing to
buy the confectionary products for their children.
2.Entry of new competitors with similar subsidised products but with
a greater margin for retailers.
3.Any increase in the price of raw materials will have to be borne by
the manufacturers as the price points are fixed due to intensely
competitive market .

SEGMENTATION , TARGETING, AND POSITIONING

For the STP analysis, we have chosen the product Mentos of the mint
and chewy segment of PVMI. Most of the PVMI products come from
the parent company products and have been adapted to the taste of
Indian consumers.

Segmentation:Demographic segmentation:
In India, most of the sugar confectionary market predominantly
targets the kids and younger generation. But apart from them,
people of the age group of 18-35 are also prefer to use sugar
confectionaries as they serve not only as a candy, but also as a
mouth freshener used for eliminating bad breath, or to be used after
smoking etc. Also, people who have an addiction for chewing gums,
find flavoured gum with a mint an appealing product with diverse
flavours.

Lifestyle segmentation:

Apart from age wise segmentation, the consumer base can be

segmented on the basis of high and middle class or low class
consumers as high end consumers prefer a hygienic product with
attractive packing which could be used in a social circle. Middle level
consumers want product packing to hold more gum pellets in a
single pack while here they also look for alternative choices
available, hence this segment is highly competitive and demands
constant innovation and quality for retention of market share.
Low level consumers primarily in rural or sub urban areas look for a
gum with cheapest price while giving the desired results. Here the
retailers usually keep single pellet packs of gums as pipe shape
packs are not demanded. Here the market competes mainly on price
point and availability as this is the segment where many low level
players penetrate into the market with comparatively subsidised
products.

Geographical segmentation:
This segmentation of confectionary gums broadly covers the design
of packaging and the price factor. In urban areas and sub urban
areas, price plays a little role in deciding the consumer base as the
products are already subsidised. Here the demand is for attractive
and innovative packaging where more number of gum pellets could
be carried in a single pack, for sharing with friends.
Whereas in the rural areas, pricing and market shelf display play a
major role as the prices are an important factor and hence higher
priced packs are not in demand. Single pellet packs are sold that too
in close competition with local low end players.

Targeting:Indian confectionary market has been, and would largely be having

a consumer base of kids and youth and so profitable target market
would be for the same with those in an urban lifestyle. Since this
market is the largest target market by volume, market potential is
high and scope for innovation in quality is good.

Positioning:
For positioning our product in consideration, Mentos has many
points in favour to acquire a good market share and to appeal to the
targeted consumer base. Mentos delivers a refreshing feeling with a
chewy gum base. The compact pipe shaped packaging with a rattle
free carrying allows it to be fit in almost anywhere. With packing
more pellets in a single tube pack, it allows sharing between friends
which is most common among kids. It comes in many flavours
ranging from mint, strawberry, spearmint and many more thus
diversifying the product to suit the taste of the consumers.
With the tagline of Dimaag ki batti jala de Mentos brands itself as
a refreshing and rejuvenating gum which appeal to the youth and
thus positions itself as a sugar confectionary which gives you new
ideas.
Also, as a future prospect, Mentos could sponsor television shows
featuring kids and youth to strengthen the bonding with the
targeted consumer base.
Mentos could bring in flavours which are more appealing to the
youths .

FUTURE STRATEGIES
Mentos is perceived as a high quality sugar confectionary which
requires constant innovation without any compromise in quality for
diversifying it`s consumer base and increasing the market share. A
diversification in flavours which are appealing to different age
groups of the society would help PVMI in demographic positioning of
the product. Also, since due to health reasons some consumers are
hesitant to take sugar based products, it could go for a sugar free
product segment while retaining it`s refreshing mint taste. Being
one of the leading players in the market, it has the onus of
innovating and repositioning itself to suit the consumer needs which
low level players cannot perform.

Since the confectionary market is distribution led and highly

impulsive, brand visibility is a crucial factor in determining sales in
retail shops and PVMI should ensure that their product`s shelf
positioning is visible to the consumers.

REFERENCING
1. http://www.perfettivanmelle.in/about-us/pvm-in-india
2. http://economictimes.indiatimes.com/opinion/interviews/innova
tion-and-quality-wont-come-at-50-paise-ramesh-jayaramanperfetti-van-melle-md/articleshow/50843130.cms
3. http://business.rediff.com/special/2009/aug/18/spec-perfettisuccess-in-india.htm
4. http://www.campaignindia.in/article/barometer-of-success-isthat-you-win-more-than-you-lose/421202
5. http://www.mbaskool.com/brandguide/food-andbeverages/2804-perfetti-van-melle.html
6. http://www.mbaskool.com/brandguide/food-andbeverages/528-mentos.html