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Presented by Bhakta ram Rana

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Perfetti Van melle is a Italy based parent company. World¶s third largest confectionery group. It have 31 manufactory plants in world wide 130 ± country Its headquarters are located Italy (Lainate) and Netherland (Breda) 17000 Employee Net sale in 2008 $1972 million 40% chewing gum 60% candies

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Its turn over is Rs. 400 crores. 5,000 distributors service. Perfetti enter to the Indian market in 1994. It has two manufacturing plants in India ² at Manesar (Haryana) and Tamil Nadu. Perfetti brands would be distributed across 6.5 lakhs outlets and the combination of rightpriced products, distribution reach and fat ad spends has ensured it a 25 per cent market share. 

Cadbury s  Nutrine  Parry  Parle  Nestle  Wrigley 

Alpenliebe  Big Babul  Center Fresh  Center Fruit  Center Shock  Chatar Patar  Chlormint  Cofitos  Happydent white  Protex  Marbles  Mentos

Vision We will enhancement world leadership be confectionery by creating value for people through delightful and imaginative high quality product. mission Develop, manufacture and market, high quality and to provide innovative product to the consumer through efficient use of our resoueces and partnership with our customer.

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1- Perfetti van Melle entered the Indian market in 1994. 2- The turnover of the company is 400 cr., and there market share is 80%. 3- They are offers to selling products at 25paise. 4- The company decided to sell the product by the small retailers.

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5- The company divided its 11 brands into 2 groups , p1 and p2. 6- P1 is doing very well but p2 is not. 7- The p2 company decided to more advertising the products. 8- the advertising cost is 17 cr.

I have done case analysis on these following points. Market Analysis  perfetti entered in indian market in 1994.  There was 80% market share of unorganized companies.  The organized market was dominated by perry s, nutrine and cadbury. 

The foreign tag was the problem for perfetti.  In contrast to other MNC who came into the

market through partnership with indian companies.  The acquisition brought a distribution network of 3 lakhs outlet into perfetti india s fold.  Ven mell was already present in Indian market.

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Increasing the outlet was difficult task for the company . So company was start focusing penetrating deeper into specific areas. The company felt that small retailer could provide the much required sales for the company. There was a small hitch in the implementing this strategy

Product Analysis
The other problem for company was that some of its product were competing for the same space as the retailer received them to substitutes for each other. ƒ It divides its 11 brand into 2 group that is P1 and P2. ƒ The sells of P1 group were double the sell the P2.
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Company seemed to want to focused on to promoting of product. Its mainly investment done in R&D and to improve its product mix and network channel. Company felt that to heavy advertising and marketing of the product, and could pull the customers and thereby improve sell. This thinking was reflected in company advertisement budget .

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By revamping the distribution network company went on to become the market leader . The reason behind the success of perfetti was distribution strategy that its competitor adopted itself. Cadbury and joyco also followed the similar strategy with small difference .

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Analyze the distribution strategy of Perfetti, which enable it to become a leading player in the indian confectionary market. Ans.Perfetti has created a multi-tiered distribution system.

Product range is divided into 2 categories, which in turn have different distributors. It divided its 11 brands into two groups P1 and P2. Non-conflicting brands like Alpenliebe original, Chlormint, Big Babol and Centerfresh were grouped under P1. CenterShock, Chlormint gum, Mentos, Marbels, Fruittella and Happy Dent were planted in P2.

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Perfetti spends Rs 17 crore for advertising and marketing of the product to attract customers and to improve sales. The company offered hefty sales-linked incentives such as increase in margin in percentage terms with increase in sales and offered one pack free on every pack sold.

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The product allotment and commission strategy adopted by perfetti led to discontent among the channel members. Explain the company s rationale in adopting such a distribution strategy.

Perfetti entered into the Indian market. During the entrance in the Indian market, Perfetti did not merge or acquired any company. ƒ It adapt the simple way that how much the goods wills be demand that much will be supplied. ƒ The great change occur when it acquired the van melle ƒ The acquisition brought a distribution network of 3 lakh.
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Instead of expanding the distribution network over a large of region, they focused on specific areas . Company focused on small retailers . Small retailers unable to purchase large quantity. The company felt to service twice in a week to the outlets. Retailers were not willing to buy the same brands twice a week. Some brands are perceived as substitute by the retailers.

To solve this problem and to keep flow of product in the market, the company had divided their product into groups. ƒ P 1 group consists of Alpenliebe original, Chlormint, Big Babol. P2 group consisted of Centershock, Chlormint gum, Mentos, Marbles, Fruit-tella and Happy Dent. ƒ The company had assigned the two groups to different distributors means one distributors can not had two groups together. ƒ P1 got double sale than p2.
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Distribution costs were same for the both product. The Company did not increase margins for distributors. The company paid 5 percent margin to the distributors compared to the average industry figure of 10 percent. Retailers were paid 15 percent when the industry standard was around 30 percent. These are the basic reason for product allotment and adapting such strategies.