When Italian chocolate brand Ferrero entered India in 2004, it started with small, cautious steps. Starting with the kid's favourite Kinder Joy and the mouth freshener Tic Tac, Ferrero slowly built up its portfolio in the country. Kinder Joy became synonymous with the surprise toys hidden inside, while, over the years, Tic Tac incorporated Indian flavours. Its flagship product, Ferrero Rocher tried to build a market for luxury chocolates and promote itself as a replacement for sweets.
Most recently, Nutella - the hazelnut spread - has caught the fancy of the urban youth who use it in innovative ways to make breakfast more interesting. But, India's contribution to Ferrero's At Ferrero, the belief is: members of the top management only help. The products do the talking, whether it's in the market or on mass media - (that's why you don't see Fiordalisi's photo in this interview!) But he did do a lot of talking when we quizzed him about his brands.
It is a kind of environment which is for both kids and parents. Each member of the family can register on it individually. The kids can have their own 'avataars' and they can then experience different sections. There are also stories which kids can listen to, or drawing and animations. The parents can also record stories on the app, which can be played back maybe when their children are going to sleep. We are looking at it as an edutainment platform. Kids can paint, they can learn English through our mascot who gives Hindi- English lessons, they can learn about sports and nature etc. There is parental control so that they can fix and limit the time the children can access it. A separate section for parents talks about the Kinder values. Because our product may be for the kids, we need to assure mothers that it is made from high-quality ingredients. There is also a common section where both parents and kids can upload pictures and videos, can chat, share experiences or content and arrange meet-ups with other parents in the area.
Our core target is kids, between 3 to 10 years. The communication is targetted at both moms and kids. The consumer is the kid who enjoys the chocolate as well as experiences the surprise or toy. Moms need to know about the quality of the chocolate, the safety of the toy, the fact that we are not putting in any preservatives or colours. So, in a way, it is a dual target.
Since we are speaking to both the kid and the parent, we advertise both on kids channels, as well as regular channels on prime-time - late afternoons and evenings when we advertise on channels which mothers are likely to watch. Overall, we are adjusting our message to both.
Our product is about two parts or souls. First is the food part or chocolate, for which we use creamy milk. But, of course, there is a lot of excitement about the Surprise. They want to know what is inside, and once they open it they can assemble the toy themselves. The toys themselves are changed every three-four months. But, the toy lasts more than the chocolate, also in the child's mind.
A part of the marketing team in the company focusses on the creation of the toys. It is a strong part of our research. We need to understand the clients and get to know what is strong in one country, and maybe not as strong in other countries. Then, there are some engineers and stylists who create the toys so that there can be a 'family of toys'. In India, we have Ringy Pony toys, where you can play with the Pony and even use the ring as jewellery. For the boys, we have Future Bikes - sort of like futuristic super-bikes. Some toys are licensed like the ones we have with Mattel, others are made by Ferrero.
Even though Ferrero is a global company, we are trying to accommodate and satisfy local needs and local insights. India itself is a big country. There are a lot of differences in habits, choices and behaviours in South, North and East markets. But, there are some commonalities. For example, for Tic Tac's flavour strategy, in the last few years we have done a lot of research with the consumers to understand what can be successful from a flavour point of view. Elaichi was introduced because it was a flavour Indians already used, and yet is close to our positioning of a mouth freshener.
On launching a product we first do a CPT - Concept Product Testing and then we develop different flavours. We understand the likability, appreciation of the taste - whether it is too sweet, too sour etc. Then, we do group testing and then launch it in markets.
The strategy is different for Tic Tac and other brands. Tic Tac is something we would like to expand in India. Of course, we added the kind of flavours and format to show that people can afford this product. In terms of distribution, we are not just present in tier one, but also in tier two cities, in traditional trade and smaller markets. Our target group is 15-25 year olds.
As far as other products are concerned, the TG is of course different. Though Tic Tac is enjoyed by both men and women, some flavours which are fruity are appreciated by women, while flavours like Mint is enjoyed more by older people. Nutella is really for mothers as old as 50-55 years. Nutella is a cool brand for young and old people, and it also enjoys the tag of being a western favourite. Ferrero Rocher's core target is SEC A, 20-45 years old.
Each of them is an important pillar in the business. We have seen good contribution coming in from Kinder Joy, which is produced in India, as well as from Tic Tac. They have a larger distribution and larger targets, while Ferrero Rocher has select distribution, only in modern trade where there is AC condition. We cannot sell it through any other shops. And, it is mainly for occasions. So, while in summers it doesn't sell much, during Diwali the sales go up. The season for Ferrero Rocher starts from July-August and continues till Valentine's Day in February.
We have faced more difficult situations for marketing Nutella elsewhere than in India, because here we have so many different types of bread to have Nutella with. Be it idli, paratha, chapati, bread - Nutella can be spread on any of these things. I have myself tried on Nutella with dosas. The South of India is very different from the North of India, considering their food habits and behaviours. We are trying to see how Nutella can be part of their breakfast mix. We want to show our consumer how to consume Nutella, mainly for breakfast. But, in India, most people are used to savoury breakfast. But it is changing, and they are trying out sweeter things like jams.
People who travel a lot or who have lived abroad know that the equity of Nutella is very high and that it is one of the strongest products where generations have grown up with it. In India, we are trying to build up a strong brand for Nutella, we have to explain what Nutella is made of.
Ferrero India is a big company. But, when it comes to contribution to our global company, there is still opportunity to grow. The group started 30-40 years ago in Europe, so we are the leading company in the segment there. We have been in India since seven-eight years. In some segments, like praline chocolates, we are leading with Ferrero Rocher; in some others, we are not. We are creating the chocolate spread category.
Firstly, it is distribution. 90 per cent of FMCG comes from traditional trade. Then there are consumer differences as well. Last year, we saw a trend of people moving from traditional mithaii to chocolates. In the past 10-15 years, consumers were not exposed to different types of sweets.
For some, we are more focussed. For example, we push new toys and surprises for Kinder Joy throughout the year, and so we have to communicate through the year. It is true for Tic Tac too, when we launch a new flavour. For Ferrero, we advertise during the festive season. More than half of our ad spends are on Tic Tac and Kinder Joy.