The Hindu Business Line : `Competition in confectioney market will get harsh'

The first secret of successful companies is to let customers define service value. "Too often, management sets service levels according to its own standards. This standard is rarely defined by the customer's perception of value, or measured in terms of customer satisfaction," rues The Customer Satisfaction Audit, by Abram I. Bluestein, Michael Moriarty and Ronald J. Sanderson of A.T. Kearney, Inc, from Book Land (www.bookland.co.in/audits) .

In a 2004 interview, you sounded very optimistic about your business growth. Are you in line?

Yes. Even 2006 was a very good year, we've crossed by far the double digits and have grown over 15 per cent last year and we still see some good prospects of growth.

So what caused this?

A number of things. New model of distribution, new products, innovative promotions, innovative ads, several of them.

How fast has the Indian market been growing over the years?

Different segments are growing at different rates. Gums are growing faster, candies so-so, breath fresheners - there's been a moment when they grew fast - the last 2-3 years. Overall, after the stagnation I mentioned earlier, the market in the last two years grew 10-12 per cent. Some years it even de-grew by 2 per cent but is now catching up.

How does India stack up?

A big operation. In my business region (15-16 countries including Russia and some neighbours, and South Asia), India is still the biggest operation. Globally, India in volume is the third company after Italy and China. The Chinese market is three times that of India.

What about your distribution, penetration into rural markets?

It's getting better and better. The good thing about our distribution is that we're also good in relatively smaller towns, below 1 lakh. We touch directly almost 4.5 lakh outlets and overall, we would be present approximately in one million outlets. And we're doing good efforts towards rural also.

Your advertising has been really over the top.

Last year, we won 17 awards for our advertising only! We have some very nice advertising (and goes on to describe some ads).

So you'd call it cutting edge?

No doubt, one of the success factors, for sure.

How much of your sales turnover do you spend on advertising?

About 10-15 per cent.

Do you develop products for local tastes?

Absolutely. Each and every single product is tested locally, and adapted locally. I say very clearly in this book local adaptation is a must, and international approach doesn't work.

These products taste very different in India?

Maybe. Sometimes, slightly different, sometimes different.

What about ethnic ones?

We did some experiments but normally ethnics are a question mark. They could do well for a while but after the novelty's gone, they'll taper down.

What are your stronger markets in India?

It used to be the North and once East, funnily enough, because that's one of the poorest regions, but now the South and the West are catching up, particularly the South.

What's the scenario of the future?

Competition will get harsher and harsher. It's not that there will be more players but bigger players. I believe in the open market and when there is competition, normally consumers gain.

Do you see any multinationals coming in?

They're all here already.

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