Godrej Hershey uses mixed strategy to increase revenue

July 17th, 2009 - 7:08 pm ICT by IANS  

Chennai, July 17 (IANS) Confectionary major Godrej Hershey Limited, with a turnover of Rs.400 crore, is looking to increase its revenue in the sugar candies segment by using a mixed strategy.
While the company has launched lollipop at half the price of the competition - Re.1 - it plans to do the opposite in the hard candies segment launching variants at price points of Re.1 and Rs.2.

“Unlike overseas markets, the lollipop market in India is underdeveloped primarily to the high price point - Rs.2 per piece. We are launching our lollipop range at Re.1 in four flavours so as to grow the market,” Kinshuk Kunwar, vice-president marketing, told reporters here Friday.

According to him the total Indian lollipop market is estimated at Rs.96 crore.

He said the 900-gm weight pack Nutrine Lollipop containing 115 units will be sold to the trade at Rs.100 to realise Rs.115 selling to the end customers.

Though the price is half that of the competition, Kunwar said the product’s weight is slightly less than that of rival products.

On the other hand, in the hard boiled sugar candies segment the company has come out with Nutrine Fruit Shoot at Rs.2 per roll to cross swords with Parle’s Poppins.

Speaking of the hard boiled sugar candy segment, Kunwar said 76 percent of the Rs.1,600 confectionary market is at 50 paise and 25 paise price point.

“Our plan is to upgrade the market offering customers premium products at Re.1 and Rs.2 price points that would also give the trade better margins,” he added.

With cricketer M.S. Dhoni hired as the brand ambassador for the candies, Godrej Hershey hopes to grow its sales.

“Selling candies is a serious business as the target customer segment is in the age bracket of 8-14. Every year one group of children would enter the segment while another bunch (15-year-olds) would exit,” Kunwar said.

Attracting the kids and retaining their loyalty is a big challenge for confectionary companies.

“One has to keep on advertising or offer some freebies like tattoos and others to sell. Further sales would drop during school vacations when the parents would cut out the children’s pocket money. During that time we have to compete with products like potato chips in attracting kids attention,” he remarked.

Queried about Hershey chocolate syrup, he said the company started manufacturing the product in India itself and has added one more pack size (400 gm) retailed at Rs.99.

Earlier, the company was importing 680-gm bottle and retailed for Rs.140.

“Last year the chocolate syrup fetched us Rs.10 crore revenue.”

Ruling out the launch of chocolate bars in the near future under the Hershey brand, Kunwar said the company will be focussing on Sofit - soya milk - beverage apart from its fruit juice brands Jumpin and Xs.

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