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Alpenliebe

Introduction: Alpenliebe, a hard-boiled sugar candy, was one of the first brands to be launched after Perfetti Van Melle (India) Ltd. (PVMI) launched its operations in India in 1994.

A wholly-owned subsidiary of the world's third largest confectionery major Perfetti Van Melle S.p.A, PVMI also had other big brands such as Center Fresh, Center Shock, Big Babol, Chlormint, Mentos, Fruitella, Cofitos, Protex Happydent, Happydent White, Marbles, Chocoliebe, Chatar Patar, etc., in its brand portfolio. As of early 2008, Alpenliebe was the single largest selling sugar confectionery brand in India and made up a major portion of PVMI's revenue, estimated to be Rs.7 billion in 2007.

Market Strategy: 1. Naming: Alpenliebe is a difficult name to adopt for a chocolate and much research on the internet couldnt help me trace out its origin. So it is a Herculean task to teach Indians ( with 24 languages and a million dialects) pronounce a brand name that does not have a meaning. Theory says that the brand name should be simple, reflect the brand values and easily pronounced. Alpenliebe broke all rules. In the initial 30 second ad of Alpenliebe pronounced the name 5 times to ensure that the TG pronounce it correctly. Why such a complicated brand name is another question all together. But this risk paid off in that the name became the biggest differentiator and reflected an International image. It is known fact that Indians are crazy about foreign brands and Alpenliebe capitalised on that.

2. Shape: The shape was also unique because most of the candies at that time was rectangular or cylindrical but Alpenliebe came out with a round shape. More than the shape and the name, the product itself was good .The company changed the taste of this brand to suit the Indian Palette making it more creamier and filled with more caramel than the international one. 3. Flavours: Alpenliebe was available in three flavors - 'rich milky caramel', 'cream strawberry', and 'chocolate'. In addition to this, the company also started marketing lollipops under the Alpenliebe brand in the early 2000s in three flavors - 'rich milky caramel', 'strawberry cream', and 'cola & vanilla'. In 2005, the company also launched a center-filled candy under the brand name Abpenliebe Creamfills. The Confectionery Market: The sugar confectionery market includes products such as sweets, jellies, and gums but not chocolate confectionery. While there was a large unorganized market for sugar confectioneries in India, the organized market in India was estimated to be US$461 million in 2007, i.e., around 70 percent of the total candy market in the country. According to Euromonitor, the market in India grew at a rate of 7.2 percent per year between 2003 and 2008.The market was dominated by PVMI, which was the market leader with a market share of more than 30 percent, Cadbury India, Wrigley's, and Lotte Confectionery.

Other significant players in the market were Hindustan Unilever Ltd (HUL), ITC Ltd (ITC), Nestl India Ltd., Candico, Godrej Beverages and Food Ltd., and Ravalgaon Sugar Farm Ltd.Analysts felt that the market was witnessing a shift with an expansion in the organized segment. In the early 2000s, the competition in the Indian sugar confectionery industry intensified. Fast moving consumer goods (FMCG) majors such as ITC and HUL too entered the fray.

In 2004, Lotte India consolidated its position by acquiring a controlling stake in one of the leading Indian confectionery companies, Parry, while Wrigley's acquired the worldwide operations of Joyco gum and confectionery businesses from Agrolimen and further consolidated its position in the Indian market where Joyco held a strong position. All these companies were devising aggressive marketing programs to corner a bigger share of the market. The sugar confectionery market in India was pricesensitive and distribution driven.

It was driven by children who spent a significant portion of their pocket money on sugar confectioneries and, as such, most of the brands were available at low price points such as Rs.0.50 and Rs.1.00. Stiff competition in the market had also ensured that the pricing was constant for nearly five years. Unlike in other countries, mono packs ruled the Indian sugar confectionery market. And a very big chunk of the sales came from unorganized mom-and-pop stores and the paan shops. Moreover, unlike in more developed markets, most of the functional and sugar-free products were yet to catch on. Marketing Confectionery in India and Alpenliebe: The companies competing in this market relied heavily on advertising, sales promotion (both consumer and trade), and the distribution network. They were trying to reposition the brands to appeal to the whole family rather than children alone and to expand the price points with value added products.

Analysts felt that PVMI had played a great role in developing the market in India. For instance, it was credited with creating the Indian caramelized candy segment in India with Alpenliebe.It did this by offering a quality product at the Rs.0.50 price point and backing it up with a smart advertising and distribution strategy.

The brand was positioned as an irresistible offering with the pay-off line-cumjingle, Jee Lalchaye Raha Na Jaaye. Considering that the brand name was somewhat complicated for the Indian audience, the initial 30 second ads for the brand pronounced the name five times to ensure that the target audience got familiar with it and pronounced it properly.

By 2002, Alpenliebe was estimated to be a more than Rs.1 billion brand in India and accounted for one-third of PVMI's revenues.

Alpenliebe variants: PVMI also kept the brand interesting to the target audience by launching new variants such as 'cream strawberry' in 2003 and 'Chocoduet' in 2007. It was a relatively late entrant in the lollipop segment. In the lollipop market that was declining (14 percent in 2002) and dominated by two brands Pim Pom of Joyco and Mr Pop of Cadburys with a market share of 70 percent and 30 percent respectively, PVMI managed to emerge as a leader in 2003 with a market share of 46 percent.

According to analysts, it had snatched the market leadership in the lollipop category by moving away from the kid-centric positioning of lollipops. The brand, marketed at the Rs.2.00 price point, was also targeted at adults while emphasizing the long-lasting properties of its lollipops in the initial ads, and then following it up with the immensely popular colloquial advertising with the pay-off line Lagey Raho (Keep going!).

Alpenliebe Creamfills, which the company had developed for the Indian market, and promoted with the pay-off line Kuch alag Achanak (Something different, Suddenly!), too did exceptionally well and was also launched in other markets including China and Poland.

Celebrity Endorsement: In 2006, the sales of Alpenliebe in India were estimated to be Rs. 1.6 billion. It was not only PVMI's biggest brand but also the biggest brand in the Indian sugar confectionery market.In the following year, PVMI roped in leading Hindi film actor Kajol for promoting Alpenliebe.

Analysts considered this a big shift considering that this was the first time that PVMI was using celebrity endorsement for any of its brands. However, Sameer Suneja was quick to point out that the script called for Kajol's presence and that it would help take Alpenliebe, which was already a big brand, to the next level.

The new pay-off line Laalach Aha Laplap was used, which promoted the message that when a person takes Alpenliebe once, the desire and greed for the candy increases.

The ad campaign, created by McCann India, showed how a crocodile (animated) accidentally tastes an Alpenliebe and follows Kajol around for more.

The launch of the Alpenliebe Chocoduet was also supported by a similar ad featuring Kajol and the animated crocodile.

In early 2008, Alpenliebe was also involved in co-branding with popular Indian actor Ajay Devgan's (Devgan) film You Me Aur Hum. Devgan, also Kajol's husband, appeared in the ad promoting the movie and the brand. Analysts felt that the concept of Alpenliebe had been beautifully integrated with the movie scenes and the theme.

With its latest ad campaigns, PVMI was trying to increase the market share of Alpenliebe further in the growing sugar confectionery market in India.

Conclusions: According to analysts, the sugar confectionery market in India was expected to grow at a compound annual growth rate of 8 percent through 2011, primarily due to increased consumption by affluent consumers who tended to purchase sugar confectionery on impulse, the retail revolution in India, and increase in the pocket money of children. But some experts were not altogether satisfied with PVMI's decision to use celebrity endorsement for Alpenliebe, and particularly its decision to go in for a theme built around an animated crocodile. They felt that though the new ads scored high on attention and recall, the company risked diluting the brand image of Alpenliebe by venturing into the realms of 'absurdism'. What is to be seen is the way in which Alpenliebe would move to increase its market share in this intensely competitive and restricted market.

This was the Case history behind Alpenliebe and now we come down what I think about the brand and the opportunities it has in the future: Challenges faced were: 1. Fixed price points and inability to manipulate with them 2. The characteristic of chocolates being an impulsive purchase 3. A stable competitor Coffee Bite in the confectionery segment 4. New brand name Strategies well executed:

1. PVMI deserves credit for creating a big brand (Alpenliebe) in the low value, low margin, and fragmented sugar confectionery market in India that was quite different from the market in other developed countries but very competitive nevertheless. 2. Ever introduction of new flavours and hence adapting to the consumer 3. Initial commercial repeated the brand name about 6 times to get the pronunciation right 4. Positioning of Alpenliebe as a fun and family brand 5. Effective marketing and distribution strategies 6. Introduction of mono and multi packs at price points of 0.50Rs, 1Re and 5 Rs. What can be done in the future? 1. Alpenliebe should maintain its positioning as a family toffee rather than focussing on the celebrity promotion campaign. Most of the TG felt that the celebrity endorsement was not in sync with the core positioning of Alpenliebe. 2. Have Alpenliebe mono and multi packs at the display counters next to the cash at the retail marts. Even though this is strategy is being followed this shelf space in any retail mart is dominated by Cadburys. Alpenliebe should focus more on having its 5Rs packs at this shelf. 3. Alpenliebe could introduce family packs with varied assortments 4. Most of Alpenliebe sales come from the Kirana stores and hence it should focus on having a sound distribution strategy for these stores.

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