For employees of the Indian unit of Mondelez International, the $32-billion snacking powerhouse formed last year following the separation of the confectionery and grocery businesses of Kraft Foods, February 1 will be a red-letter day. Almost 800 to 1,000 people across departments will hit the road as salesmen and women in about 50 to 60 cities in the country. Their task will be to convince local shop-keepers to stock their company’s products (that is, if they haven’t). At those retail outlets where Kraft’s products are available, these men and women will get down to rearranging the stock based on a planogram.
Mondelez may be taking a leaf out of the marketing manual of Hindustan Unilever (HUL), which has been organising initiatives such as Perfect Stores for the past few years, but there is a motive for this mass sensitisation drive at the company. The marketing-savvy Mondelez is keen to focus its attention on sales, buoyed in part by the growth the company has witnessed in India. For the 2011 calendar year, Mondelez, which is registered in India as Cadbury’s, saw sales growth of 35 per cent to Rs 3,359 crore, while net profit rose 42 per cent to Rs 297 crore (full-year numbers for 2012 are yet to be declared).
On an average, Cadbury’s in India has grown at a clip of about 25-30 per cent per annum. Since Kraft took over the business in 2010 and subsequently integrated it with itself, the pace of growth has increased, analysts say. It is now keen to maintain this momentum as competition in packaged food grows. Sunil Taldar, director, sales and international business, Mondelez, says the company will now move into rural areas - a step that it tentatively took in 2012. “We undertook a pilot targeting shops and retail establishments in the countryside of Maharashtra and Andhra Pradesh. We will now take this to more states this year.”
In the process, the company is expected to aggressively grow its footprint. Mondelez’s products are currently available in almost 900,000 outlets in the country - an increase of about 200,000 in a year.
The gameplan, says Taldar, will be to not only look at distribution expansion, but also target the right stores - mainly retail establishments where there is assurance of business. For most sales people at consumer product companies, say experts, the challenge is increasingly moving from reach to what the store can offer and how best to target consumers who frequent these outlets. In industry parlance, it is called shopper marketing and executives from top to down are encouraged to visit shops and spend time with consumers to understand their requirements.
No surprises then that chief executives of most top multinational consumer product companies, who have come visiting India in the last few years, have all spent time on the shop floor, whether it is Paul Polman of Unilever or Irene Rosenfeld of Kraft or Rakesh Kapoor of Reckitt Benckiser. Taldar says the reason for this emphasis on shopper behaviour is because purchase decisions are increasingly happening in the shop. “People don’t have the time and in impulse categories such as biscuits, chocolates or confectionery, the pressure is even more,” he says. “You have to then use product, placement, price, promotion and communication to ensure that you have managed to get the attention of the consumer. A purchase decision will take place when these attributes are all in place,” he says.
The sales team at Mondelez, for instance, has done little things to improve traction on the shop floor. At outlets that stock its products, the items are placed in units that can carry different brands from the company and not necessarily products from one category alone like say chocolates or biscuits or powdered beverages. This way display is given to all products and the units can be opened by the consumer without having to wait for the shop-keeper to open and hand over the product to the shopper. “We came up with this idea after having observed consumers at shops. Typically, you have different units for different brands, which leads to clutter. Second each time a consumer wants to have a look at the product, the unit opens from the shopkeeper’s end. Consumers land up wasting time. We have reversed this with these multi-brand units that open at the consumer’s end,” Taldar says.
But while multi-brand units work well in small kirana stores where space is limited, in modern trade, the emphasis on single-brand displays continue, Taldar says. “The display in modern trade is different from traditional trade. There is more space available in modern trade and the profile of customers is different,” he adds.
In the last one year, the company has also upgraded its frontline sales force with hand-helds to capture store orders, which are linked to the distributor billing software. “Distributors are linked to company portals to manage auto replenishment of inventory,” Taldar says. The frequency of consumer promotions in retail outlets in key categories such as chocolates and biscuits has also grown in the last one year, he adds.
