Nutella

COMPANY OVERVIEW

This remarkable story began in 1946, in Italy, where, after the war, candy and confections were in short supply and were purchased mainly for special occasions from the local sweet shop. It was here in northwestern Italy in the small town of Alba, that master confectioner Pietro Ferrero developed a system that enabled him to mass-produce true quality confections and offer them to consumers at reasonable prices. That original Ferrero philosophy was based on a few simple principles: 

Use only the highest-quality ingredients



Be unique! Never copy anyone else; then



Manufacture with the most modern technology

Add to that, procedures for ensuring consumers taste only the freshest possible product, as well as some very clever marketing, and the Ferrero story began to unfold. Ferrero is company founded in 1946 in Alba. Originally from pastry shop, today Ferrero International is the world’s fourth largest companies in the confectionery Market with 16 plants & 36 commercial companies all around the world having 20,000 employees generating 35,000 crores of turnover in 2006. A wide & complex portfolio of products, including mainly: chocolate spread, candies, pralines, bakery, chocolate snack eggs with surprise, cold tea & chilled chocolate products.

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FERRERO IN EUROPE & IN INDIA The European confectionery industries are very competitive, heterogeneous and highly fragmented markets with some major players leading the industry in nearly all countries involved in this business meeting. About two third of the entire market is satisfied by the top ten western European confectionary companies (67%).The five largest Western European countries including the UK, Germany, France, Italy and Spain alone account for 74% of the total Western European confectionery market leaving only a share of 26% which is spread across the remaining European countries. Chocolate products clearly dominate the confectionery scene followed by sugar confectionery, chocolate outlines and chewing gum as shows the table below: The first of the Ferrero products was Pasta Gianduja, a chocolate-hazelnut spread that, re-named Nutella®, was destined to become the #1 selling sweet spread in the world. Since that first successful venture, Ferrero has gone on to introduce many of the most celebrated confectionery brands in the world.

Although Pietro Ferrero and his brother Giovanni had laid the groundwork for future company success, when both died in the early 1950's, it fell to Pietro's son, Michele Ferrero, to continue the pursuit of their vision, as Ferrero expanded across Europe and then abroad. Ferrero first moved beyond Italy in 1956, establishing both manufacturing facilities and offices in Germany. This was followed by new facilities in France in 1958. In the late 60's and early 70's, Michele Ferrero began a strong new phase of international expansion with sales offices and production facilities outside Europe. Ferrero U.S.A., Inc. was first, then came Ferrero Canada, Ferrero Australia, Ferrero Ecuador, Ferrero Brazil, Ferrero Japan, and Ferrero Inc. in Puerto Rico.More recently, offices have been opened in Hungary, Poland and in the Czech Republic. 2

It was in 1969 that Ferrero U.S.A., Inc. first opened for business in New York City. To introduce the Ferrero story in the vast and unique U.S. market, Ferrero U.S.A., Inc. chose as its lead product, not the enormous Nutella® brand or one of the hugely successful Ferrero chocolates, but rather the smallest Ferrero wonder of all - Tic Tac®! Shortly after its introduction, the signature Tic Tac® "Tree" display was appearing at U.S. checkouts everywhere and America was singing along with Ferrero's catchy: "The distinctive Tic Tac® green has been followed by the dazzling gold of Ferrero Rocher®, the fine chocolate and hazelnut "praline." Is it any surprise that Rocher® is rapidly becoming a mainstay of increasingly-sophisticated American tastes, and that Ferrero is once again making quality confections a part of everyday life … for treats as well as gifts.

Following the success of Tic Tac® and Rocher®, consumers are now beginning to enjoy the distinctive taste of Nutella® spread. As it rapidly gains distribution and awareness across the U.S., it's destined to become as big a success here as it is in Europe.

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PRODUCT OVERVIEW NUTELLA: A HEALTHY BREAD SPREAD Jams and jellies are one such bread spreads that made their entry into the Indian market in the early 1980’s and are still popular especially amongst the children, but keeping in mind the health aspects and the rising concerns towards obesity, a healthier substitute for jams is necessary in the Indian market and one such product is the Ferrero ‘NUTELLA’. Nutella is the brand name of a hazelnut-based sweet spread registered by the Italian company Ferrero at the end of 1963. Nutella spread, in its earliest form, was created in the 1940s by Mr. Pietro Ferrero, a pastry maker and founder of the Ferrero Company. The Nutella story starts in 1946 and a small Italian town called Alba. At the time, cocoa was rationed and so, in an attempt to make chocolate more economical, pastry maker, Pietro Ferrero, mixed cocoa with hazelnuts and vegetable oils. The result was a solid chocolate cream, which he christened Pasta Gianduja.

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Gianduja is a type of chocolate containing about 50% almond and hazelnut paste that was developed in Piedmont, Italy after taxes on cocoa beans hindered the diffusion of conventional chocolate. Pietro Ferrero owned a patisserie in Alba, in the Langhe district of Piedmont, an area known for the production of hazelnuts. In 1946 he sold an initial batch of 300 kilograms (660 lb) of "Pasta Gianduja". This was a solid block, but in 1949 Pietro developed his first spread, which he first sold in 1951 as "Supercrema". The first jar of Nutella left the Ferrero factory in Alba on April 20, 1964.

‘World Nutella day’ is celebrated on 5 th of February.

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Ingredients: The exact recipe is a secret closely guarded by Ferrero. According to the product label, the main ingredients of Nutella are sugar and modified vegetable oils, followed by hazelnut, cocoa and skimmed milk, comprising together at most 28% of the ingredients. The recipe for Nutella varies in different countries. In the case of Italy the formulation uses less sugar than the product sold in France. Nutella is marketed as "hazelnut cream" in many countries; it cannot be labeled as a chocolate cream under Italian law, as it does not meet minimum cocoa concentration criteria. Nutritional value: Nutella is claimed to be a very healthy chocolate spread with 55% sugar and 35% fat content. Nutella has low GI (Glycaemic index), no cholesterol, no Trans-fats and contains traces of vitamin-e Per 15 g of Nutella

NUTRIENTS

AMOUNT

Energy

80 kcal

Carbohydrates

8.89 g

Fat content

4.7g

Sugar

8.3 g

Protein

1.9g

Fiber

0.40 g

Sodium

6.06mg

Source: www.thedailyplate.com

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Although Nutella is marketed in a variety of packages, its typical containers have always been those made of glass (plastic containers are more common in the USA, and Mexico). Initially, the most popular glass containers were quite small, in fact just the size of a standard table glass for drinking, with the result that they can be used as normal table glasses once the product inside has been consumed. Different forms of these glasses are produced.

Nutella is also very popular in the rest of Europe, India, Malaysia, Puerto Rico, Australia, New Zealand, Singapore, Brazil, Trinidad and Tobago, Mexico, the Philippines, Egypt and South Africa, mostly with children and teenagers. This is less true in the United States and Canada, where the product was only available as an expensive import until the 2000s. In the United States, basketball star Kobe Bryant was a former spokesman for Nutella, having grown up in Italy.

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NUTELLA AS AN IDEAL BREAKFAST SPREAD Breakfast literally means 'breaking the fast'. When we wake up in the morning, we will have been without food for a long period of time and our blood sugar levels are low. It’s really important to fuel our bodies with nutritious food to provide the energy needed to start the day. Research has shown that one in four children don’t eat breakfast despite the fact that it is recommended that approximately 20% of the day’s nutritional requirement is eaten at breakfast time. Nutella is a low GI food so it releases its energy slowly. Low GI breakfasts have been shown to help maintain energy levels and reduce the need for snacking later on, so Nutella on wholegrain toast can be a good option to start the day – and children love the taste. Contrary to popular belief Nutella is a hazelnut rather than a chocolate spread, containing almost twice the amount of hazelnuts to cocoa. In fact, in each 15g portion there are two whole hazelnuts, and Nutella contains no artificial colors, preservatives or hydrogenated fats. Nutella has been proven to release its energy slowly (Source: Leatherhead Food International) and with no need to use any additional butter or fat-based spread, it is a good alternative to peanut butter or jam at breakfast time. A portion of Nutella on a slice of wholegrain toast, with other breakfast components such as a bowl of unsweetened cereal with milk and a glass of pure fruit juice is a good option for breakfast. The key is balance and moderation - some foods like fruit and vegetables in large amounts and others like Nutella, other spreads such as jam and peanut butter, in small amounts. Problems such as obesity are growing amongst children, part of which is as a result of a poor diet and a sedentary lifestyle. One child in four does not eat breakfast, leading to snacking.

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TARGET MARKET  Teens- college students: sampling and product demonstrates are the best marketing strategies to promote Nutella in India.  The targets for the product are kids. But the mothers of those kids form the target for communication. The target had to urban upper middle to upper class mothers with kids of 5 years to 14 years of age.

COMPETITION Worldwide there are many natural and man-made bread spreads like honey, butter, cheese spreads, jams, jellies, fruit butters, fruit spreads, marmalades, mayonnaises, peanut butter, nut spreads, chocolate spreads, Chocó paste, Chocó dip, Chocó pudding etc. Butter and cheese spreads are also very popular manufactured by amul, mother diary, Dina’s etc In the jams and jellies segment the market leader is kissan and other brands like sil are also present. Mayonnaises are not very common in India but marmalades are available. Chocolate pastes, chocolate pudding and dips are also available which are used as bread spreads, the most common one being the Cadbury choco paste followed by many other brands like hunt’s Chocó pudding etc. Though globally there are products similar to Nutella but in India there is no product like it. The products available are only chocolate pastes, puddings or nutty spreads.

COMPETITIVE ADVANTAGE Nutella is positioned in a unique way altogether, it’s a bread spread which is tasty yet healthy unlike peanut butter which is not that tasty but immensely healthy. Jams, jellies on the other hand which are tasty but not healthy. So Nutella is a perfect balance of taste and health. Its texture and its nutritional value make it the right bread spread.

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THE COMPARISION BETWEEN NUTELLA AND SOME OF ITS MAJOR COMPETITORS IN TERMS OF THE NUTRIENTS PRESENT (per 100g) Nutritional

Nutella

Elements

Peanut

Jams and

butter

jellies

Butter

Cheese

Energy

527kcal

585kcal

268cal

717cal

440cal

Carbohydrates

54g

20g

69.9g

-

2.68g

Fat

29.7g

50g

Traces

81.0g

4.51g

Protein

7g

25g

0.15g

0.88g

12.49g

Sugar

54.0g

9.2g

51.2g

-

-

Fiber

2.0g

6.0g

1.05g

-

-

Calcium

130mg

43mg

Traces

5g

60mg

Iron

2.8mg

1.87mg

-

-

0.14mg

Sodium

-

17mg

-

575mg

404.8mg

Magnesium

75mg

154mg

-

-

5.26mg

Potassium

-

649mg

-

-

81.3mg

Phosphorus

-

358mg

-

-

131.8mg

Source: www.calorie-counter.net

The above table shows that peanut butter is more nutritious but it’s not as tasty as Nutella. The other competitors are good in terms of energy, vitamins and minerals but they provide less of carbohydrate which is the most essential element in any breakfast. Hence Nutella is a good blend of taste and nutrients, but it would have been the best if it had more vitamin and mineral content.

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SCOPE OF NUTELLA IN INDIA India is witnessing a shift from traditional food eating habits to a more contemporary and westernized eating styles and hence fast food chains, cornflakes etc are gaining more and more popularity. Bread is still seen as food item taken only during illness but it is more accepted as a breakfast item in urban India. The per capita consumption of India is just 1.75 kg to 2.0 kg compared to Europe whose per capita consumption is around 200kg; even our neighbor Sri Lanka’s per capita consumption is around 23kg! The total market size of bread industry is approximately 15 billion standard loaves (SL) or 1.5 million tonnes. The current growth is around 5 - 6 percent p.a. and is expected to remain in the same level in the medium term. Around 36 lakh loaves of bread are produced daily in India, in which only 1/3rd of it is from the organized sector. The percentage of bread consumed in the four regions of India

Regions

Consumption of bread in percentage

North

27

South

32

East

18

West

23

Source: www.fnbnews.com

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Rankings of the bread spreads BREAD SPREADS

RANK

Honey

1

Jam

2

Butter

3

Cheese

4

Cheese spread

5

Peanut butter

6

Mayonnaise

7

Marmalade

8

Sauce

9

Jelly

10

Nutella

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With respect to their preferences they have ranked honey as number 1 because according to the mothers it’s natural, contain a lot of nutrients kike vitamins and minerals, and have no negative effect on the body. Nutella has been given rank 11 because the mothers are unaware of its benefits. They just know it as a dip or a brown colored spread. They are unaware of its positives and negatives.

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FINDINGS The key findings of the research done prior to making IMC plan are: A lot of mothers (62%) face challenges while ensuring a healthy diet for the kid. The biggest challenge they face is preparing a healthy breakfast (70%) followed by having no idea what a healthy breakfast should comprise of. Indian mothers still prefer traditional breakfast and hence only 6% of mothers opted for daily use of bread thinking it’s tasty, easy to handle and consume. Whereas 70% of the mothers opted for occasional use saying it would be a change for the kids. 24% would never want to consider it as an option for breakfast because they think bread is unhealthy, leads to constipation and doesn’t suffice as a meal. 70% of the mothers would like to consider bread spreads because they are tasty, healthy, kids like it, and it’s easy to prepare and consume whereas 30% of the mothers would not like to consider bread spreads because 22% of them opined that they are not healthy. With respect to awareness and usage of the different bread spreads, jams and sauces come in the first place as all the household use them followed by honey, butter etc. The bread spreads they are least aware about are the marmalades and Nutella. With respect to the preference on bread spreads the mothers have ranked honey on no 1 followed by jam. They opine that honey being natural is the best bread spread, the kids like jam a lot because of the taste and hence they have ranked jam on no 2. Butter again being natural is on the third position. Towards the end are jelly, sauce and Nutella because either the products are not used as bread spreads or they are still not aware of them. 14% of the mothers opted for daily use of Nutella and 67% opted for occasional use which is a good sign. Only 24% of the mothers have heard about it as a brown colored spread or a chocolate dip. Not many are aware of the product Nutella. On the basis of the findings above we can revise the SWOT analysis of Nutella with respect to India.

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SWOT STRENGTHS It’s high on carbohydrates which the major nutrient lacking in Indian kids and it’s the most important nutrient to be consumed for breakfast. It has low GI and it works for the apprehensions of the mothers and keeps the kid energetic all day long. It’s tasty and delicious and will definitely work for kids. Quicker to make and easy to eat which will solve the problem of working mothers who find preparing breakfast a challenge.

WEAKNESSES Chocolate in the morning is not very welcomed in Indian homes yet Indian mothers and kids are still inclined towards the traditional food.

OPPORTUNITIES The Indian market has been and will always be a welcoming one for new products like Nutella as it did for Kellogg’s. The purchasing power of Indians has been on a raise of lately and the rise of urban middle class will be appositive sign for Nutella. The population of youth is more and hence Nutella has a bright chance of succeeding. Not much of a competition exists in India.

THREATS The strong Indian mindset towards traditional food and against bread can be one of the threats. There are no much of a threats until it gets positioned After positioning it has to beware of duplicate brands

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RECOMMENDATION AND CONCLUSION With respect to our product the advertising goal will be for informing the audience which is called the informative advertising. This type of advertising is to create brand awareness and knowledge of new brands or product. To select on the media the company has to decide on the reach, frequency, and the impact. Media is also selected on the basis of target audience, product characteristics, message characteristics and the cost of the advertisement. The four distinct areas can be dealt with four different types of media. The awareness can be through special articles in women magazines, women websites like indianmothers.com. This public relation activity can also be carried out through radio campaigns to reach out to a larger target.

The demands from the target: Kids demand different foods because of its taste which is the primary reason followed by ease of consumption and TV ads. Kids are unaware what is healthy and what is not, they get attracted toward tasty food and which is easy to eat. Hence from the analysis we can see that it’s the traditional food which they demand more as it has lot of variety in it. Even in the traditional food they demand change and taste. As it is evident from the ranking, it can be seen that as we go down the rank the taste also keeps on decreasing. These demands sometimes make the kids difficult and mothers face a lot of challenges like in preparing the food, changing the menu, convincing the child and challenge in not knowing what a healthy breakfast should comprise of. Kids are very much influenced by TV ads and their mothers are through authentic sources. This area can be addressed through TV commercials as it would stress on the demands kid make and the challenges faced by mothers. Product testing could also be an option. To address this problem we need to first of all make them aware what are the nutritional requirements of the kids especially childhood and pre teens. If there is a gap what are the symptoms and how can the gap be prevented or rectified. Our product can be an answer because it’s high in energy and low in calories which are the biggest concerns of urban upper middle class and upper class mothers. This area can be addressed through outdoor advertising like danglers in super markets and public places where in, in each of the dangler we can stress on a particular gap. 15

Perception on bread and bread spreads: Indian mothers are still very much inclined towards the Indian traditional cuisine for breakfast. Many even opine that there is no gap or in the traditional food as it has been a tradition and the prior generations haven’t faced any nutritional problems. Though their concerns about bread as daily breakfast can be justifies but in order to remove the gaps and the challenges faced bread can act as a solution only if it’s paired up with something healthy. If the bread spread is positioned as a source of high energy with low GI and low calories it can work for the apprehensions. The most important findings have been that the biggest gap which is seen by mothers is the energy gap, children skip breakfast because of lack of time, and they demand tasty food and working mothers face a challenge in preparing a healthy food. Nutella can be an answer for all these apprehensions as it’s such a food which is quicker to make, easy to make and eat, healthy and very tasty.

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