Marketing Planning

Group ProjectOn

Mentos(Section 1)

Submitted to Prof Anita Goyal

ByGroup 10Section A

Mangement Development InstituteGurgaon-122001

Word Count: 1580

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Mentos

(The background)

In 2000, Perfetti Van Melle (India), the wholly owned subsidiary of world’s third

largest confectionery company launched Mentos in India.

Mentos has been PVM’s largest brand and is world’s second largest

confectionery brand. When it first came into India the company extended its

global positioning strategy of the brand as the ‘freshmaker’ but it soon realised

that the Indian consumer could not identify with the tag line. This led to the

localization of the brand leading to the immensely successful “Dimaag ki batti jala

de” and the “Aam zindagi/Mentos zindagi” campaigns. They also learned that

India is totally different market from the global markets in the following ways.

1. India is a primarily mono-pack market as compared to global multi-pack

market and 90% of Mentos sales are from individual dragees.

2. The trade patterns are significantly different with organised sector comprising

just 60% of market share of the confectioneries industry (in 2000). Also here

retails outlet like paan shops and kirana stores resulting in the bulk of sale

leading to to a great deal of logistical difficulty.

3. Presence of legal bottlenecks like the obsolete Prevention of Food

Adulteration Act which hinders growth in many ways:-

Products like sugar free which are used worldwide cannot be used

Limits like 3.5 percent of moisture content a slight default from which

makes one liable to criminal offence

4. Very competitive selling prices of 50 paise. made it difficult for the company to

innovate on the price front because the margins in the industry were very low.

The company subsequently had to adopt a brand marketing strategy suited to the

Indian environment resulting in a strong brand image of Mentos in the mind of

the Indian consumer.

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Swot Analysis of Mentos

Strengths:

Excellent promotion

Funny and creative ad campaigns have made Mentos have very high brand

awareness and recall.

Effective distribution

It is available at every cigarette wallah and paan shop. It is available at over 20

lakh outlets.

Unique position on the perceptual map

Its chewy texture gives it a differentiating position in the market. All its

competitors are either hard boiled sweets or chewing gum.

Large product range

Mentos is available in a wide variety of flavours and variants which gives it an

edge over single flavour brands such as Polo and Chlormint.

Successful brand positioning

The funny and irreverent ad campaigns has led Mentos to be identified as a cool

and trendy product by its target demographic, the youth

Weaknesses:

Rock bottom price

Due to its low price of 50 paise it is difficult to pass on any increase in input costs

or taxes to the customer.

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Not strong enough

It is not the first choice of smokers who prefer a stronger taste. They form a

major part of the consumers who buy breath freshening candies.

Chewy texture

Although its chewy texture gives it a unique positioning it also makes it

unappealing to many who prefer traditional hard boiled sweets.

Opportunities

Global trends

The per capita consumption of sugar confectionaries in India is only 250 gms per

capita while it is 4.89 kgs in UK and 7.81 kgs in Denmark and so there is plenty

of scope for growth for everyone.

Shift to organized sector

The ratio of organized to unorganized sector in the Indian confectionary market is

60:40. As customer affluence increases the demand for quality goods will also

increase

Forecasted growth

The Indian confectionary industry is worth Rs 2000 crores and is expected to

grow at a compound annual growth rate of 8 percent through 2011. The soft

mints category, however, is expected to grow at a rate of 30-40 per cent on a

year-on-year basis.This growth is primarily due to the retail revolution in India,

increased consumption of affluent customers and the increase in the pocket

money of children.

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New flavours

Perfetti could try launching some of its international flavours such as green apple,

cinnamon and pineapple in India either as a limited-edition, novelty product or a

permanent part of its product range.

Gift set

Mentos could also try introducing a trendy Diwali gift set as an alternative to

traditional Indian sweets and dry fruits.

Threats

Intensity of competitive rivalry

It is a low involvement, impulse purchase making it easy for a rival product with a

better marketing campaign to capture some of Mentos’s market share.

Substitute products

Its rivals do not just include chocolates, chewing gum and toffees but also

traditional Indian sweets such as jalebi, paan and mithai. Besides consumer

preference for chocolates is increasing as income levels are going up.

New rivals

A new entrant like Mars or Hershey Food could significantly eat into its market

share

Competition

Mentos not only competes against rival products from by Nestle, Wriggley’s,

Candico, Cadbury’s, Ravalgaon, Dabur and ITC but also competes against its

sister products from Perfetti (Chlormint, Alpenliebe, Centre Fresh)

Customers

Increasing health awareness could affect the sales of sugar-based products.

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Distribution

The distributors operate on a margin of 6-7% while it is 10-15% for retailers. This

is at the lower end of the industry standard. An increase in input costs cannot be

absorbed any further without raising the price or reducing the quantity.

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MARKETING MIX

Product:

Mentos is a product of Perfetti Van Melle (PVM) and is the world’s second largest

sugar confectionery .

The Mentos candies fall in the category of chewy dragee. The candies have the

unique positioning of being hard and crunchy on the outside, which when chewed

disintegrates to a soft gum-like consistency and releases its breath freshening

characteristics.

Mentos is produced in India in 3 flavors: mint, strawberry and lime but is also

available in grape and mixed fruit by importing packages from Arab countries and

repackaging it in India. Assorted flavors are also imported and repackaged.

The candies are packaged in mono-packs or rolls of thirteen and the weight of

each individual candy is 37.5 gms.

PVM India focuses primarily on the mono-packs, which form 90% of Mentos’

market. This strategy is derived from the fact that India is largely a mono-pack

market as against the global scenario, where confectioneries are largely a multi-

pack market.

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Price:

Mentos is a low involvement, impulse purchase product which is priced at 50

paise for the mono-packs and Rs 5 for the rolls

Competitors, however, have similarly priced products and stiff competition has

made sure that prices are largely constant. Thus, price is not really a

differentiator in this category.

However due to its price of 50p it is difficult to pass on any increase in taxes or

input costs to the customer.

Place:

Mentos is distributed across India by Perfetti Van Melee’s strong distribution

network which has around 4500 distributors across 2000 urban towns.

It is stocked at over 20 lakh outlets of which 25% are paan shops.

The bulk of the sales are derived from unorganized mom-and-pop stores paan

wallahs and kirana shops. This leads to significant logistical difficulties.

The retailers have an operating margin of 10-15% while it is 5-7% for the

distributors. This is lower than the industry standard of 15-17% and 7-10% for

retailers and distributors respectively.

Promotion:

Mentos is primarily targetted at the youth and college going crowd, belonging to

sec’s A and B who can relate to the funny and irreverent campaigns.

Most ads in this category generally talk about fresh breath or the more tongue in

cheek suggestion that mints help a guy attract a girl. That’s where Mentos ads

deviate from the other ads in this category. “Mentos doesn’t talk about the

functional benefit at all – it works on a psychological level, where people

associate the brand with the imagery of ‘smartness’.

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Mentos uses freshness, unlike its rivals, not as a product attribute, but as a state

of mind in its promotion. Some of its most memorable tag lines include “Dimaag

ki batti jala de” and “Aam zindagi/mentos zindagi”.

The advertising account is handled by Ogilvy & Mather India Ltd which has won

numerous creative awards for its innovative and imaginative Mentos promotions.

The latest advertisement by Mentos showing evolution of man with a humorous

twist has been well accepted. A survey conducted in February 2008, by Synovate

India ranked all advertisements on television on the basis of awareness and

brand recall. This Mentos commercial was ranked 2nd overall with 90%

awareness and 96% brand recall and 86% on the ad reach index.

Mentos has become one of the first products to use the internet to be a major

part of its campaign. This is in line with its cool youthful image and has launched

the whacky Mentos Helpline website which gives the users “expert” advice on

their life problems.

The Mentos Helpline has received considerable word of mouth publicity and has

received a boost from the blogging community which has been giving links to the

site.

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The TV advertisements have proved to be such a hit that they have received

considerable viral marketing from savvy internet users who post the links to the

Mentos videos on You Tube.

The ads are now being reproduced in various languages with local actors for

markets across Asia and Europe

REFERENCES

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1. http://www.foodnavigator.com/news/ng.asp?n=65256-food-for-britain-denmark-

ireland-consumption

2. http://www.marketingpractice.blogspot.com

3. http://icmrindia.org/Casestudies/catalogue/Marketing/MKTG190.htm

4. www.mentoshelpline.com

5. www.mentosfriendsline.com

6. www.perfettivanmelle.com

7. www.perfettivanmelle.in

8. www.ogilvyindia.com

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