We asked Prashant Peres, Director - Marketing (Chocolates), Mondelēz India, a bunch of questions around the chocolate segment, his marketing challenges therein, and the way in which his relationship with his agency partners has changed of late. The interview has three broad segments - Category, Marketing and Advertising.
In the last 12 months, premium segments and rural markets have grown. The Cadbury Dairy Milk master brand crossed the 41 percent market share mark and in February 2017, hit a record high of 43.4 percent.
Our single biggest challenge is to be able to continue to grow the chocolate category while remaining competitive in terms of share.
We have seen consumers using chocolates, and not just Indian sweets, to mark celebratory occasions. Secondly, the gifting space has expanded considerably; today, while Rakhi and Diwali continue to scale up, there is significant chocolate consumption on other occasions like Valentine's Day, Friendship Day and New Year's as well.
As disposable income has expanded, Mondelēz India has led the premiumisation agenda within the category, with Cadbury Dairy Milk Silk. The most recent trend is 'individualisation' - chocolates used to be shared, but now more and more consumers are choosing to snack on and indulge in chocolates by themselves. For this, we recently launched Cadbury Fuse.
The biggest change is that manufacturing technology in India has more than caught up with the rest of the world. We recently inaugurated Phase 1 of our largest multi-category production facility in Asia Pacific, established in Andhra Pradesh, with an investment of USD 190 million. It is spread across 134 acres of land (55 soccer fields) at Sri City.
The project is expected to be completed by 2020. The completed plant will have an annual capacity of 2,50,000 tonnes. In this first phase, the plant will produce 60,000 tonnes of chocolate per annum (20 trucks of chocolates a day). It houses state-of-the-art 'Lines of the Future' (LOF) manufacturing, Lean Six Sigma and end-to-end supply chain management.
Earlier, chocolates were considered to be more for the upper classes. They were seen as a treat for special occasions. The relevance of chocolates has now increased across income classes; people now consume chocolates on a more regular basis. Also, we have seen a significant increase in rural consumption, as the availability of chocolates has grown.
The demographics of the Indian consumer have also changed, moving from the 'aspiring' class to the middle class. Traditionally, these consumers have marked this movement with higher spends on 'small treats' like chocolates.
Chocolates in India have a relatively lower per capita consumption vis-à-vis some of the developed markets. As category leaders, our focus is always to expand category consumption by driving penetration and frequency of purchase. This will be done by driving more consumption on occasions and making chocolates accessible across points of purchase, by driving distribution.
CMOs are responsible for growth charters, revenue generation and P&L management. Their role is by no means restricted to traditional marketing (brand management, media and advertising) any more. A CMO, as the voice of the consumer, plays a role in product development, distribution, manufacturing models and corporate affairs.
If we were to lose touch with consumers and miss out on emerging trends. Playing catch up on missed opportunities can be very difficult and resource consuming.
In addition to Nielsen data, store off-takes, household panels and consumer tracks, we now get information from 'Social Listening'. This way, we get information about the buzz-worthiness of our campaigns. We get early reads into our new launches. Analytics and forecasting models for business have become stronger.
Our spend is optimised across multimedia. TV continues to be the lead medium with increasingly higher spends on digital and point-of-buying. In some segments like premium gifting and dark chocolate, digital is our lead medium.
Marketing has never been a precise science. It has always had stakeholders who have a point of view on brands. Over time, as organisations and brands 'globalised', the stakes and stakeholders, or brand custodians, grew. All our brand custodians have clarity on their roles and responsibilities.
We expect our agency partners to reach consumers in newer ways and build integrated campaigns. Creative and media agencies have to come together early on and co-create work.
We also expect them to embrace analytics-driven, technology-enabled media planning and buying. Creative execution needs to be native to each medium, especially for digital.
We need greater rigour in reviewing digital campaigns and real-time to change/correct course.
There's greater scrutiny on non-consumer facing spends and agencies have to partner us on this.
(This interview is part of our Marketers' Special Issue - afaqs!Reporter magazine, June 15, 2017)