An interview with Perfetti's recently appointed MD.
A few weeks back, Italy-headquartered Perfetti Van Melle India appointed Rajesh Ramakrishnan as its new MD. He has been with the company for four and a half years, initially as the MD for Bangladesh, then as chief transformation officer (CTO), a role that brought him to India.
An engineer from BITS Pilani, with an MBA from XLRI (Jamshedpur), Ramakrishnan started his career as a management trainee with Reckitt Benckiser (then Reckitt and Colman). His early rounds as a sales manager took him to North and South Karnataka followed by stints in Orissa, Bihar and Tamil Nadu. Ramakrishnan worked on brands like Cherry Blossom and Robin Blue; it was eight years of sales and marketing with Reckitt. This was followed by two years with Marico, where he worked on non-Parachute brands like Shanti Amla and Hair & Care.
Then for another six years at Frito Lay (PepsiCo) he looked after Kurkure for a while and did a brief stint in Bangkok in a regional role - with Quaker on insights and innovation. He then stepped out of FMCG for a bit with a year at Apollo Tires looking after global markets for the Apollo Brands and then it was on to Hindustan Times for two years.
In India, popular brands from the Perfetti stable include Big Babol, Centre Fresh, Center Fruit, Happy-Dent, Mentos, Juzt Jelly, and Alpenliebe candy and lollipops. The brands are broadly classified as gums, candies and jellies.
The company's new product offerings include jelly candies with Vitamin-C, available in packages specifically meant for modern trade and Center Fresh mints - the first extension of the original Center Fresh gum into the mint segment that has been launched in the South.
Ramakrishnan, who has been in the industry for over 24 years, is a photography and trekking enthusiast (he recently completed Everest Base Camp and Kilimanjaro) - things that 'stimulate his right brain', as he puts it.
The confectionery markets in Bangladesh and India are similar on the product front, but Bangladesh is a much smaller market... and in terms of stage of evolution, is a few years behind India. The intensity of competition here (India) is much higher.
CTO was a newly created role; the idea was to optimise our business model which includes different facets like the product portfolio, the go-to market strategy, the operations and, of course, the people and capabilities. The job was to lead these multiple projects in a structured manner.
While being CTO was more about managing all these projects, being MD is more about managing the whole business. It's a bigger role. It's like a mix of operations and strategy.
In FMCG, marketing drives the company. Marketing drives strategy and strategy drives growth. In non-FMCG companies, marketing probably plays more of a support role and is not necessarily the prime driver of growth. For instance, at Apollo, manufacturing would play a far bigger role than marketing. In a media company (Hindustan Times), media marketing or sales is a bigger role in driving the agenda, whereas marketing is just about making sure that the right support is provided. But in FMCG, it's marketing that drives the entire thinking for the company. That is the biggest difference.
The fixed price-points - like 50 paise, one rupee, two rupees... it's slightly similar to marketing snacks. In the confectionery category, price elasticity becomes a challenge. When we are at a price point of Re 1, we cannot shift to Rs 1.20... we have to jump directly to Rs 2. There are consumers who drop out because of the price.
Also, in the confectionery category, products get exchanged as currency (replacement for loose change; an insight Paytm has milked in its advertising).
The frequency of consumption is another difference. I've worked on categories like shoe polish and fabric care. You polish your shoes maybe once a week - if you really decide to! Similarly, you may use shampoo or toilet cleaner once in a week or maybe once every three days. But confectionery is different. If I eat a candy in the morning, I can still eat a candy two hours later. Due to the sheer frequency of consumption, the number of transactions is huge.
Also, confectionery is easily available to people, it's so in-your-face that it's a benefit. You don't have to tell too many people about it; everybody knows about it, which is a good starting point.
Most of our products, as Nielsen defines it, are sold in paan outlets which make for a significant chunk of sales. Then there are grocers and general stores/ kiranas. We are available in modern trade too. E-commerce for confectionery helps to customise offerings to customers; that's one of the directions we see it moving towards in the future.
We have a huge footprint of distribution. There's headroom to grow, especially when it comes to some of the higher price points like the Rs 5 and Rs 10 packs.
Advertising is mostly rooted in a product insight; it starts there. It then has to link back to what the brand promises and have some cultural angle as well. It's a triangulation of these three things.
Whoever picks it (rival brand doing well) up first - maybe the sales team or the operations team - brings it to everyone's notice. We then look at it and say - 'is that an area of interest and opportunity for us?'
Once we decide to respond, it is important to understand what they offered to the market, what element of the mix worked for them... if we see a bigger opportunity, we look at how we can address it etc. We then leverage some of our strengths and take advantage of the opportunity. I don't think anything happens as a knee-jerk reaction. It's well planned out and executed.