On 21 Aug our strategy class presented their analysis on the Chupa Chups case study – Pravesh, Christina, James, Nishkam, Sonali. The name Chupa Chups comes from the Spanish word for suck – chupar. The team did a great analysis and there were lollipops for all in the audience. Cristina our student from Spain also joined-in to share some interesting anecdotes on Chupa Chups. Reshma from Semester I and Gaurav from Semester III also participated actively. Chupa Chups case discussions always evokes much enthusiasm.
Sweet on a stick
In the days before lollipops children messed up their hands, faces and clothes with sweets – Enric Bernat spotted the ‘felt need’ of moms and came-up with the idea of a sweet on a stick – lollipop. Thus Chupa Chups value proposition was aimed at ‘moms’.
In the 60s Enric Bernat created a strong distribution network in Spain: an large fleet of 600 ‘Seat’ cars were used to distribute Chupa Chups lollipops among 300.000 outlets all around the country. Each car was decorated with the Chupa Chups design so that people could recognize them in the streets – a simple yet effective advertising.
Enric Bernat’s visionary leadership to expand aggressively worldwide was powered by an organizational capability that had a ‘killer instinct’. Imagine with just one product range of lollipops they entered almost all the continents in the world successfully.
Chupa Chups first developed in Spain their core competency in ‘process technology’ for high volumes and leveraged them across its operations across the world.
Chupa Chups changes nationality
The Bernat family owned Chupa Chups for more than 50 years. In 2006 they sold the famous lollipop to Italy’s Perfetti Van Melle (PVM), the world’s fourth-largest manufacturer of chewing gum and candy after Cadbury, Wrigley and Haribo. Perfetti’s internationally known brands include Alpenliebe, Daygum, Golia, Happydent, Mentos (the Freshmaker!) and Vivident, as well as the Airheads brand of candy in the US.With not many innovations or star products coming up and the difficulty of replacing its charismatic founder, the Bernat family decided to sell the company. No product apart from Chupa Chups achieved the same level of success.PVM proved to be the best choice among the many contenders. In Perfetti’s hands the brand no longer will be Spanish but its future is secure.
Perfetti Van Melle already in India in since has set up three factories in various parts of the country. PVM market share is more than 25% share of the confectionery market today. The company’s success, say experts, is mainly due to its innovative products – it was the first company to launch center-filled gums and candies in India.
But for the confectionery market in India it is not price points alone but also challenge of weaning away the Indian consumers from the traditional ‘Mithai’. Competition in the Indian market is fierce with the main players being Nutrine, Ravalgon, Parry and Parle among domestic players as well as multinationals such as Nestlé, Wrigley and Spain’s Joyco.
In India Perfetti leads the Indian sugar confectionery market with more than 25 per cent of the value share of the market. Perfetti India, launched its first brand in the Indian market in1994, the popular brand, Center Fresh.
Customer involvement in confectionery brands is quite low as such Perfetti has ramped up its ad budget heavily to gain build brand recall and break through the clutter.
Chupa Chups Wacky Ads – “Life Less Serious with Chupa Chups
”Chupa Chups communication strategies have been through wacky ad campaigns. Ads have always been catchy – it all started with Eric making a request to the renowned Salvador Dali a Spanish surrealist painter to design the Chupa Chups logo. Dali created the exciting brilliant red and yellow wrapper that has become Chupa’s brand identity around the globe.
With Perfetti Van Melle’s too the fun goes on – “Life Less Serious with Chupa Chups” central to the campaign is Chuck Chupa Chups new global mascot a puppet who personifies the “blithe attitude of youth and always remains unfazed, no matter what life throws at him”. He is featured in stressful scenarios like being pressured by a distressed girlfriend and getting yelled at by an overzealous personal trainer. In both situations, his reaction is to suck on a Chupa Chups, with his signature deadpan expression.
Teenagers, leading ever more stressful and serious lives, crave for a moment’s escape. Sucking on a Chupa Chups is that temporary solution -Will Chupa Chups be a hit with kids in India too?
Reshma asked an interesting question – why Chupa Chups is not seen in shops in India? In Pune a shop in MG road sells them for Rs 50 a lollipop .I’m a Chupa Chups boy! Knowing the irresistible appeal of Chupa Chups for kids can brand Chupa Chups break free from the strangle hold of a low-price point market? Should Perfetti introduce Chupa Chups aggressively in premium market or be content in pushing low priced Alpenliebes & Mentos with a distribution-driven strategy?
Award Winner – The Chupa Chups Badge
Cheers! THE CHUPA CHUPs BADGE Dilip Sharma and Gaurav Arora are awarded the Chupa Chups Badge for their spirited participation and comments!