Candy and Chocolate

India(CCL)
GROUP-4
V.SHARADA PGP/17/058
K.R.R.RAJENDRAN PGP/17/148
K.SIVARAM PGP/17/149
R.BHARATH PGP/17/160
VISWESH.S PGP/17/188

Case Background
Founded in 1970, CCI is a player in the Confectionary, Beverages and
Prepared foods market
15 brands and 36 SKUs- recorded sales of $26 million in 2012
Indian confectionary market, comprising of chocolates, sugar candies
and gums was worth Rs. 6.5 billion in 2010, with CAGR 12%
Per capita consumption of India was low at 20gm, when compared to
global average of 3000gm
CCI reconfigured its RTM in 2007, chiefly to enable it to reach the
rural markets, and increase availability of CCI brands

Rural Market in India
68.8% of the population lived in Rural areas, representing 12% of the
global consumer population
From 2001-2010, 50% of Indias GDP came from rural markets
Penetration of confectionary was only 10% in 2010
Rural consumption was accelerating at CAGR 5.1%
Rural consumers were driven chiefly by price
RTM of CCI

Current situation and Problem Statement
Villages with population less than 10,000 the market was growing at
30%, as compared to 18% in the bigger villages
CCIs present RTM did not allow them to reach these smaller villages
Problem Statement :
To identify a RTM (Route to Market) that is easy to operationalise,
scalable, sustainable, cost-effective and increase the chocolate and
candy consumption in rural markets by expanding the reach of its
distribution network
Checklist for Rural distribution system

1. The company should choose the distribution network model that is
appropriate for the product or service it is selling.
2. While continuing to meet the customer's needs, the company should
aggregate consumer demand into central locations as much as possible
in order to decrease inventory and transportation costs.
3. The company should consider taking advantage of rural
entrepreneurs (REs) to facilitate last-mile product delivery and sales.
Source: Benjamin Neuwirth, Marketing Channel Strategies in Rural
Emerging Markets
Alternatives
SUPERSTOCKIST
MODEL
HAATS VAN SALES SHG MODEL
MOBILE
ENTERPRENEURS
INDIA POST
PROS
Necessary mileage and scalability to reach remaining
63% of villages with population more than 10000
Well-structured channel design with the possibility to
form clusters and reduce channel conflicts
Better Operational Flexibility
CONS
Brand activation and consumer engagement not taken
care of
Revenue per stockist declined when model was scaled
Alternatives
SUPERSTOCKIST
MODEL
HAATS VAN SALES SHG MODEL
MOBILE
ENTERPRENEURS
INDIA POST
PROS
Consumers preferred Rural Haats
Accessible by road
Platform for brand activation
CONS
Temporary Haats difficult to track
High competition at the Haats
Alternatives
SUPERSTOCKIST
MODEL
HAATS VAN SALES SHG MODEL
MOBILE
ENTERPRENEURS
INDIA POST
PROS
Promotion and Brand Awareness taken care
of
Direct engagement with consumers
CONS
Only 23% villages have roads Limited
scope
Alternatives
SUPERSTOCKIST
MODEL
HAATS VAN SALES SHG MODEL
MOBILE
ENTERPRENEURS
INDIA POST
PROS
Customer engagement created through
personal selling
Reduced transaction costs for company
CONS
Sales Volume lesser compared to Van
Sales/Haats/Mobile Traders
SHGs were not spread evenly in India
Operational issues of training women
Alternatives
SUPERSTOCKIST
MODEL
HAATS VAN SALES SHG MODEL
MOBILE
ENTERPRENEURS
INDIA POST
PROS
Expertise in knowing the interests of local
community
Cost Effective
CONS
No guarantee on ability to introduce
behaviour change
Direct competition with established brands
like Nestle and Kraft
Alternatives
SUPERSTOCKIST
MODEL
HAATS VAN SALES SHG MODEL
MOBILE
ENTERPRENEURS
INDIA POST
PROS
Reliability and on-time delivery of
consignments to retailers
Cost Effective
CONS
Nature of Products prohibited Tie-ups with
CCI
Risk of losing bargaining power to India
Post
Analysis of Margins
ROUTE NET MARGIN
Super stockist Model 34.52%
SHG 22.52%
Mobile traders 22.13%
Haat 25.14%
Because BOP forces an extraordinary emphasis on price performance, firms must focus on all elements of
cost- C.K Prahalad, 2006
From the view of cost, Super stockist is clearly very expensive comparatively- it can be eliminated as an
option

Channel Analysis
ATTRIBUTE Superstockist Haats Van Sales SHG Mobile
Traders
India
Post
Cost Effective
High Reach
Brand
Activation
opportunities
Consumer
engagement