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Thursday, January 18, 2001

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Money is where the mouth is


Ratna Bhushan

Some months ago, when Warner-Lambert India slashed prices of Clorets, its mouth freshener brand, it went to town announcing that `kisses were now at half the price.'

That a big deal was made of a product priced at an unassuming 50 paise per unit was a sure indication that something as basic as freshening up one's breath was not only an attractive business proposition, but a trend that has assumed significant connotations in recent times.

Ask GeneratioNext. They'll swear that there could be nothing more socially damaging than foul breath -- it could kill budding romances, imply desertion at society dos and hinder corporate success, among other hazardous effects. Besides, quick-fix solutions to freshen up breath also need to comply with what's socially acceptable. So while popping a 50-paise mouth freshening candy in public is the done thing, unfolding a paan would be disastrous for one's image (besides staining the teeth and tongue). So what if Indians have chewed paan (betel leaf), paan masala, gutka, saunf and the likes for decades?

Today, it's a different story. Despite mouth fresheners being a minuscule segment (estimated size: Rs 40 crore) of the organised oral gratifier market (estimated size: Rs 1,000 crore), the category has potential. Take Warner-Lambert. Last year, the company actually withdrew its popular chewing gum brand, Chiclets, to focus on hard-boiled confectionery. That, despite synergies between the two being obvious, and Chiclets accounting for sales of over 30 per cent in the North alone.

Perfetti India Ltd, meanwhile, has balanced its act between hard-boiled confectionery (Chlormint mouth freshener and Alpenliebe candy) and chewing gum (Centerfresh). Observes A. K. Dhingra, Director (Sales & Marketing), Perfetti, ``Mouth fresheners is a small segment compared to confectionery, but the category is growing nevertheless.'' Another player is Actimint from Joyco Ltd (formerly General de Confiteria).

Then there are the veterans -- Nestle's Polo and Candico's Minto. While Polo is on steady turf with its `mint with the hole' platform, analysts say that the `all mint, no hole' Minto has been losing market share owing to inconsistent inputs. Says Jagdeep Kapoor, Managing Director, Samsika Marketing Consultants, ``Among the two, Polo is definitely a clear leader in terms of image and positioning. And while it is not a core Nestle brand, it's significant all the same.'' According to a Samsika study, the domestic mint market is estimated at Rs 176 crore, with Polo accounting for an 85 per cent share.

Meanwhile, the confectionery market has been abuzz with talks of a Minto sell-out, but Candico officials insist the brand is fairly healthy and that a fair mount of money is now being pumped into it.

At the other end of the spectrum is DS Foods' Pass Pass, which, though traditional in perspective, occupies a high-voltage youth positioning. Says Ashok Aggarwal, Vice-President, DS Foods, ``We have created a category in ourselves. The fact that the one-year-old Pass Pass will be a multi-crore brand this financial year is an indication that a gap existed for this product.'' He adds that test-marketing exercises for Pass Pass in the US and Europe have shown positive results. Now even if competition comes up in the natural mouth freshener category, Pass Pass has made its place.

Survival in the category, however, is a balancing act. Explains Kapoor, ``The oral gratification market has three elements to it -- a tangible benefit, the social acceptability factor (the salience of which has gone up in the past one year), and the critical sizing-pricing balance. Whenever this category has not been sensitive to price and size, volumes have fallen. A judicious mix of both factors is crucial.''

According to one analyst, the market for high-priced candies is extremely limited. ``It's been seen in the past that for all the money spent on advertising and consumer push, if the pricing is not right, the brand backfires,'' he elaborates.

Warner-Lambert's Clorets is a classic case. After having burnt its hands with incorrect pricing, the company dropped the price of Clorets last August from 75 paise to 50 paise with positive results. Says a Warner-Lambert official, ``Post-relaunch last August, Clorets' volumes have increased six times.'' Now that even Halls, Warner-Lambert's medicated lozenge is at 50 paise, the company's confectionery division is expected to clock its first profits by the year-end.

However, analysts feel that the damage done has had more impact than Warner-Lambert would like to admit. As Kapoor observes, ``Clorets had captured the initial initiative in the category. But erroneous pricing caused it to lose momentum. Chlormint, therefore, wrested the advantage.''

Apart from generating volumes, a 50-paise price point works on the convenience platform. At 75 paise, either the consumer ends up paying Re 1 and loses out on 25 paise, or the retailer sells at 50 paise and incurs a loss of 25 paise. And in a market where single-unit sales dominate, inconvenient pricing magnifies the problem.

Says Dhingra, ``Typically, the market in mouth fresheners is for mono pieces, accounting for 75-80 per cent sales. So while ideal price points are multiples of 25 paise, a 75-paise price point is neither here nor there.''

While pricing strategies are restrictive, so are input costs. Take packaging. While market trends necessitate glossy packs with attractive graphics, marketers say they have to bear heavy costs without cushioning. The excise duty on all confectionery products was doubled from eight per cent to 16 per cent in the last Budget. ``The duty structure has left the industry gasping for breath; it has had a killing effect on the industry's profitability. The effect on marketers is cascading, because we cannot pass the burden to the consumer,'' laments Dhingra.

And despite the promise it shows, the category still needs a fair share of concept selling. Add to that negligible brand loyalty, which leaves marketers little choice but to dole out big money on general hardsell.


Last November saw Clorets attempt a maiden initiative to tap the Web through a `Clorets kiss of life' contest on Contests2win.com. It was accompanied by a whacky television and theatre campaign created along with Channel [V]. ``While the electronic campaign was on till late last year, the C2W initiative is being promoted through Channel [V] for six months -- till March,'' says the company's official. While the Net campaign was aggressive, the official line was that the objective was to build a `long-term association with the consumer and not expect short-term results'. Warner-Lambert's current ad budgets are reportedly in the region of Rs 6-7 crore.

Take Chlormint's current five-series electronic campaign. Characterised by the required aggression and attitude, it targets youth to the hilt. Of all Perfetti's key brands, it's Chlormint that's occupying prime-time television slots now. ``That we are spending money on Chlormint shows that we have faith in the category,'' says Dhingra. According to Kapoor, Chlormint's advertising has played a significant role in notching up brand recall.

Pass Pass, meanwhile, continues to be endorsed through youth icon Raageshwari. Polo, on the other hand, has been supported with advertising `as and when required'. Minto, however, has hardly seen any advertising in the recent past.

On the positive front, regional preferences and points of sale do not affect the category, with effective and widespread distribution ensuring steady take-off. Chlormint, for example, is available at 2,00,000-plus outlets. And the success story of Pass Pass has led to a series of me-toos such as Aas Pass, Saath Saath, Time Pass and Pyaar hi Pyaar, especially in smaller towns. That, by itself, is indication that mouth fresheners is a category bound for glory.

Fresh breath energy

Mouthwashes (Listerine, AM PM), chewing gum, candy, medicated cough drops, even toothpaste -- all qualify as breath fresheners. And everyone's been preaching the importance of fresh breath.

Crores have been spent by marketers on each of these categories. Remember Wrigley's campaign which consistently talked of social interactivity? Toothpaste category leader Colgate Dental Cream has sold itself on the banishment of saans ki badbu for decades, while Colgate Gel was promoted through a heavy duty fresh breath energy platform.

While large confectionery players such as Cadbury, Nutrine and Parry's are not necessarily selling mouth fresheners, there's no reason why they won't ever. In fact, Parry's Confectionery had a brand called Lakerol in the market through a joint venture with a European company. However, this joint venture has come unstuck and the product has gone off the shelves. And if Hindustan Lever does enter the confectionery segment, as has been reported, freshening up the mouth could mean very big business.

 
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