Marketing Report - Ferrero Group - Launching new product in India - Assessment Answer

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  • Introduction and Background to the Ferrero Group Company

The main aim of this task is to study the current market condition in India so as to launch a new product – fruit jams by Ferrero Group. This task involves studying the economic conditions of India, demand and supply factors, confectionary industry description etc. Also, SWOT Analysis will be carried out for the Ferrero Group Company in order to identify the relevant strengths, weaknesses, opportunities and threats in the confectionary market. This report is highly beneficial to the Ferrero Group as it provide a detailed market analysis, product lines, current markets etc. This report can be used as an initial reference to decide whether launching new product (fruit jams) in India under the Ferrero Group will be beneficial.

Ferrero Group is one of the most popular global confectionary companies currently operating in 53 countries that include India, United States, Australia, New Zealand etc. Products manufactured by Ferrero Group are sold either directly or indirectly in nearly 160 countries through various authorized retailers. Global presence of Ferrero Group has been extensive and is increasing constantly which clearly defines the product quality, capability of the Ferrero Group to quickly adapt itself to changing market conditions and responds immediately to the requirements of different global markets. (Ferrero.com, 2016)  Another important fact to consider is that the Ferrero Group and its products are in sync with the routine needs of customers around the globe. Looking at the brand products range manufactured by Ferrero Group, it is quite clear that their focus was on limited types thus, maintaining very high quality and satisfied customers around the globe. Ferrero Group brands are divided into four categories. They are: (1) Nutella (2) Kinder (3) Ferrero Pralines and (4) Tic Tac. (Ferrero.com, 2016)

Country where the new product launch by Ferrero Group is targeted is India. India is one among the highly populated countries with diverse people. Current markets in India are: IT and non IT businesses that include small – scale, medium – scale and large –scale industries, food chains, hospitality, travel industries, automobiles, electronics, confectionary industries, e – commerce etc. (Businesstoday.in, 2016) Few very popular product lines in India are: Nestle, Parle, Everest, Wipro, Reliance etc.

  • Market Description
  • Market Size

The confectionary market size in India was nearly in the range of US $ 1.3 billion in the year 2013 and is expected to grow even more by 71 percent and can nearly reach US $ 2.2 billion by the end of year 2018. (Whitehead, 2015)

  • Market Leaders

Confectionary market leaders in India are: (1) Nestle (2) Cadbury (3) Hershey (4) Mars (5) Ferrero (6) Perfetti etc.

  • Market Concentration and Distribution

Figure – 1 shows a pie chart describing the confectionary market concentration and distribution in India with the market leaders and their production shares (in percentage %).

Confectionary Market concentration and distribution in India

  • Industry Growth

In the year 2009, confectionary market was ranked at number 25 in the World and since then, the confectionary market in India has emerged to be one of the biggest and highly developed food processing domains of the country. The reason for this tremendous growth is the liberalization and as well as growing Indian economy. This has led to various MNC companies to make their investments in the Indian market. According to statistics obtained from a research report titled “Indian Confectionary Market Analysis” various significant and vast numbers of changes are observed in the Indian confectionary markets that are measured in terms of consumer behaviour pattern and trends. (Rncos.com, 2016)

However, a part of the different organizations particularly the multi-national companies (MNCs) in the Indian confectionary market has increased the resistance and also the per capita utilization, by driving and pushing forward new things at economical price, and thus making it attractive to the customers by special offers and promotions. During the research, it was discovered that there is an increasing trend of giving gifts of confectionary items and unexplored local  business segments are one of the important factors that are dependent upon to improve the Indian confectionary market quicker than imagined rate of growth. Funded by these parameters, the Indian confectionary business segment is believed on to improve at a CAGR rate greater than 18% during 2012 – 2015.

The confectionary business sector in India is segregated into three components: gum market, chocolate and sugar ice cream parlour, which is in turn divided into sub-components. Our research specialists studied and discovered the confectionary market usually speaking, using accurate methods with attention to details, and provided market estimation (for both worth as well as volume) until 2015. Out of all sub components of Indian confectionary market, biting gum business segment is dependent on to improve at the highest rate of growth, in terms of quality in the subsequent years.

It has already been observed that different domestic, local and international companies are prepping up for taking up the opportunity to reap benefits from the improving ice cream parlour segment of India. Our report gives piece of the significant organizations in chocolate and confectionary market, and aggressive scene of the Indian sweet shop industry, which incorporates business diagram, item portfolio and late organization exercises.

The report, which has been intended to comprehend the Indian confectionary showcase extensively, likewise broke down the significant business drivers, alongside the difficulties upsetting the development of this industry. Thusly, the report gives comprehensive and top to bottom investigation of Indian ice cream parlor market which will demonstrate unequivocal for the customers, and help them take sound venture choices.

swot analysis

swot analysis

  • Findings Explanation of the SWOT Table

Referring to Table – 1 of SWOT Analysis written for Ferrero Group for their new product launch, fruit jams, it is quite clear that Ferrero Group has much number of strengths as per the Analysis carried out with respective to Indian confectionary markets. As Ferrero Group brand name is known globally, they do not have to think high on commercializing the product. Another significant point to consider is the limited range of brands and products manufactured by Ferrero Group, which clearly indicate the high quality of products maintained throughout. Also, loyal customers’ is another plus point to the Ferrero Group. As already mentioned in the SWOT Analysis Table – 1, Nutella is one among the favourites among Indian consumers and the new product which is fruit jams, will be produced under the brand name ‘Nutella’, which will attract more number of consumers to try their product.

Ferrero Group must ensure to price the product in accordance with other leading fruit jam producers in India such as Kissan Fruit Jams. High pricing might affect the product sales in the initial period. In order to attract consumers’, who are diet and health conscious, Ferrero Group can manufacture two different products under the fruit jams label – with sugar and without sugar (supplement). By doing so, they can easily attract large number of consumers to try their product.

  • Recommendations

Target Market

Ferrero’s Target market for the launch of new product – fruit jams under the brand ‘Nutella’, will be teenagers, kids, working people and also old age people. Fruit jams are generally preferred by kids and teenagers and hence, more focus on marketing, commercializing or advertising will focus on this segment of market.  

  • New Product Description –

Ferrero Group will be launching a new product under their brand name – Nutella and the product is a fruit jam. Fresh fruit extracts will be used to prepare these jams with fewer amounts of preservatives used. Also, wide range of new flavours will be made available in market such as grape flavour, orange, pomegranate, apple, mango, watermelon etc. Some of these flavours are new to the entire confectionary market and hence, the chance of attracting wide range of customers is high.

  • Customer Value Proposition –

Customer value by new product – fruit jams is provided in many terms. First is the product pricing: fruit jams by Ferrero Group will be priced at a current competitive rate in India. All the flavours will be priced same and trial packs will be made available initially in markets. Also, to target health conscious people, fruit jams with supplement sugar will be prepared and these will be priced slightly higher than the normal package.

  • Justification of the choice of new product using S – O (Strengths – Opportunities) Strategy –

Referring to Table – 1 SWOT Analysis, the choice of new product will be made using the strategy of S – O (Strengths – Opportunities). Because, as already explained, Ferrero Group has maintained limited number of their product brands in markets and thus, high quality is maintained. Also, they possess loyal customer base which clearly shows the quality of products sold by the Ferrero Company. Among the Ferrero Group’s brand products, Nutella is one of the consumers’ favourite product and is a chocolate flavoured bread – spread product. Taking this as an opportunity, the new product – fruit jams will be launched under the brand name – Nutella and thus ensure the level of quality provided by the new product.

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