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CATEGORY: Packaged Foods

About the brand:

Nutella is a brand of sweetened hazelnut cocoa spread manufactured by the Italian

company Ferrero that was first introduced in 1965. Ferrero is the worlds 13th largest package
food company and is positioned as premium confectionary brand. Nutella was created by the
Italian confectioner, Pietro Ferrero, also the inventor of Ferrero Rocher, Tic Tacs, and other
sweets. At the time, there was very little chocolate because cocoa was in short supply due to
World War II rationing. So Mr. Ferrero used hazelnuts, which are plentiful in the Piedmont
region of Italy, to extend the chocolate supply.

Nutella is global and niche brand, with the product being sold in 75 countries and catering
to breakfast spreads market. Historically, Ferrero has promoted Nutella as part of a
nutritious breakfast using taglines like fuel the day. But in 2015 the company quietly
adjusted many of its marketing claims and
advertising strategies in wake of a class-
action settlement. Nutella was first exported
to the U.S. in 1983 where it received the same
enthusiasm and customer loyalty it had
become accustomed to throughout
Europe. The Nutella brand is targeted at
moms with kids primarily.

The brand is one of the most loved products on the breakfast table in most of the countries.
The product is all natural using no additives such as preservatives or colouring which makes
it more relevant today than ever. The brand has an almost cult like following, to the point
that a core group of loyal consumers created International Day for the spread not many
consumer goods can claim that type of loyalty.

Customer Relationship Management Strategy:

Nutella has spent a lot of money and resources to find the recipe for its distinctive taste that
has lured in customers over the years. The brand has remained extremely consistent in the
spreads taste, texture, colour and density which are primary recognition points for the
consumers. The product itself has attracted fierce customer loyalty which consequently
reduces the rate of deflection. Its slightly premium pricing is also justified by its targeting
and positioning as a delicious and healthy alternative to preservatives-filled jams, aimed at
families with higher disposable incomes.

Nutella wanted to build a lasting relationship with its customers and attach a sense of
community to its iconic brand. To achieve this, they needed to make each customer feel
special and trigger an emotive response that encouraged deeper connections with the brand.
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The solution was to build a campaign that focused on personalisation, with customers being
given the opportunity to receive printed labels, or purchase personalised jars, that displayed
their name in the trademark Nutella typography.

To tap into the lucrative millennial market segment whilst also appealing to their core target
market of families required Nutella to engage with their customers on a truly personal level.
Nutella realised a product offering which appealed to individuals was also of a mass appeal.
To do so, Nutella adopted a one-to-
one customer relationship strategy
which focused entirely on the concept
of Make Me Yours with customers
invited to personalise their Nutella
label. It was called Your Nutella,
Your Way.

Nutella has a strong online presence

on Twitter, Facebook, Instagram and Pinterest. The brands official website curates recipes of
how Nutella can be used to make various desserts and dishes. It also invites its customers to
share their recipes and experiences (You and Nutella), hence establishing engagement with
them. Over 76000 personal stories from 114 countries have been shared since the platform
was created. It entered pop-culture trend this way by the method of sharing content and
becoming cool. The direct customer relationship is maintained by the retailers.

Nutella realised that its customers are generally very high income, Asian and lower middle
age. They are more likely to purchase Nutella during a larger pantry stocking trips. To
increase its share of wallet on a more frequent basis, Nutella came up with mini Nutella jars
of 30gms that can now be bought for travels, weekly grocery shopping trips as it is more
pocket-friendly and small in size.

Delivering value through 4Ps:

Product:

Nutellas distinctive taste and consistency in texture make it an extraordinary product

simply because its consumers love it for the product that it is. The decadent spread contains
no added preservatives or colouring, unlike jams. It is very open about the sources of its
ingredients which lends the product credibility. The spread form makes it easier to use and it
complements almost everything bread, parathas, rotis, biscuits, pancakes, waffles, crepes,
ice creams, etc. It is suitable for vegetarians and does not require refrigeration.

Nutella also comes in various packaging sizes, which the consumers can choose from
according to their consumption need and situations. Originally it had three sizes Small (375
g), Medium (725 g) and Large (1 kg). The size of the three variant jars differs from country
to country, looking at glocalization.
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Then it introduced smaller packaging
in terms of Mini jars (30 g) and
Nutella and Go! (52 g) which
contains Nutella spread as well as
breadsticks and can be bought as a
snack. The jars are reusable too.
Their customer insight for product
requirement has made it a successful
brand. It sold 7 million unique
Nutella jars across Italy that attracted a lot of consumer attention.

Price:

Nutella has a slightly premium pricing but the brand has positioned itself in a way to justify
it. It offers a unique, high-value quality value proposition and is targeted at urban, higher
income families. Its image as delicious as well as fun also makes 14-27 year olds (main
consumers) pay for the premium pricing. Nutella knows that its taste cannot be replaced and
loyal consumers are willing to pay the premium price frequently for it and hence it uses
the skimming pricing strategy. It also assure of top quality and an aspirational feeling.

Place:

Nutella is mainly sold via indirect channel system of distribution, i.e. retail stores and
supermarkets. This does not allow direct customer interaction to the brand. Apart from
being sold in brick stores, Nutella can also be bought on click stores like Amazon, Flipkart,
BigBasket, etc. This makes the purchase
process more convenient.

Recently the brand started Nutella pop-ups in

Hong Kong and Oceania, two of its largest
geographical consumer base.

The other convenient methods adopted by the

brand are Nutella Mobile and Nutella Kiosks. Nutella is also opening Nutella Cafes and
Nutellarias in Chicago, Toronto, Bologna and Frankfurt where all recipes are based on
Nutella and will give its consumers an experience of the brand personality as well as
enjoy Nutella in an innovative way. This is implemented with an aim to increase indirect
and out-of-home consumption.
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Promotions:

Nutella is rising on the tide of word-of-mouth but it also engages in visuals-dominated

promotions and advertising to retain its market share and expand it too.

Nutella advertisements always feature images of family, filled with a bunch of excited
children joyfully eating their Nutella-filled breakfast. Thes TVCs are customized from
country-to-country, keeping up with
glocalization and understanding consumer
culture.

Before Nutella became a global

phenomenon, its first turning point in the
global market came in 1988 when Nutella
signed its three-year sponsorship of the
Italian national football team. This
brought about brand recognition throughout
the world.

It also focuses on direct marketing and digital marketing to increase brand awareness and
create consumer engagement. To celebrate Nutellas 50th birthday in 2014, Nutella launched
the 50 Years Full of Stories campaign that asked fans of the brand to share their fondest
memories of the delicious hazelnut spread from around the world. Its posts on Facebook,
Pinterest and Instagram rely heavily on visuals.

In terms of outdoor advertising, Nutella sets up Nutella vans, places

interactive panels, billboards on bus stands. Its most successful
campaigns are Your Nutella, Your Way, Wake up to Nutella and
the print campaign Please do not lick the page.

It also offers various discounts, price slashes and offers Buy 1 Get 1
Free deals for limited periods in supermarkets where Nutella is
purchased in bulk or for pantry stocking.
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Quality, Loyalty and Satisfaction:

The use of high-quality ingredients for production of the spread ensures top quality which
results in customer trust and satisfaction. Nutella buys its hazelnut from Italy and Turkey,
sugar from Brazil, palm oil from Malaysia and cocoa from Ghana and Ivory Coast. The
almost single origin nature of its ingredients makes sure that the quality is consistent.
The quality control is applied from the earliest stage of sourcing ingredients and a
computer-controlled quality check is implemented after the hazelnuts are cleaned and
roasted. Nutella is very firm on performance quality of the product.

Nutella has established a huge base of loyal consumers by marketing itself as a cult brand
rather than an iconic brand. It focuses on value-for-exchange as Nutellas taste is globally
loved and it can be used in personal, innovative ways. It falls in hedonism sphere which
appears as a pursuit for satisfaction to consumers. It is an active brand, high on
entertainment and garners equal chain reaction as well as individual reaction. Being a cult
brand is the result of extraordinary consumer tribe, and only secondarily of extraordinary
product. On Maslows hierarchy of need, Nutella falls under Esteem needs and
Belongingness in emerging markets which maintains strong loyalty. It has created a
customer community, so much so that small private businesses are opening Nutella-themed
food joints. The highest achievement can be recognized
when its fans started International Nutella Day which
is now adopted by the parent company Ferrero.

Nutella Cafes and Nutellarias around the world offer

b along with unique food experience, which deliver the value
proposition and achieves loyalty as well as satisfaction. It
also started derived products range like Nutella T-
shirts and accessories to maintain loyalty to the brand.

Nutella always follows incremental innovations in delivery network and packaging aimed
to expand customer satisfaction. It is trend responsive which is evident from its customized
jars campaign (Your Nutella, Your Way).

Survey about Quality and Value Satisfaction:

According to a survey conducted among 20 respondents, more than 95% prefer Nutella as
a breakfast/snacking option. But of those 90%, 26% consume it regularly, 32% occasionally
and 37% rarely. The brand awareness and its preference are high but Nutella has still not
managed to capture Indian households as a regular breakfast option. This is because of its
high sugar level, being a chocolate spread which is viewed as unhealthy.

On a scale of 1 to 5 for its taste and quality, 1 being the worst and 5 being the best, almost
55% responded as it being the best and 40% rated it as 4. This proves the Nutella is loved
for the product that it is and has captures consumer satisfaction driven by its taste.
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In terms of its preference over competing brands, 55% said that they would only prefer
Nutella while a 19% said they would prefer it on most occasions. The hesitant responses were
linked to its issue of being too expensive and overflowing out of the budget. 8% of the
respondents said that they dont like the product.

Talking about its price, 90% of the people think that it is expensive but out of that 67%
people also agree that they dont mind paying for it as it is value for money. This shows
that the brand has created customer value and a loyalty where they dont mind paying a
premium price for the product. 96% of the people also said that they would definitely
recommend Nutella to someone. Nutella has achieved consumer satisfaction by fulfilling
its value propositions.

About the brand:

Paper Boat is a brand of packaged non-carbonated beverages and energy

drinks produced and marketed by Hector Beverages, which is located in Bangalore, India. It
is local brand of packaged drinks made for instant consumption. The product consists of
traditional, authentic indigenous Indian drinks
that are packaged in single serving, flexible pouches.

Paper Boat produces a total of 14 flavours, annually

and seasonally. The beverages are produced using
local spices, fruit, flowers and pulses, and some of
the fruits grow wild, such as jamun and kokum. The
company has stated that it does not use artificial colouring or preservatives in its products.

The brand was introduced in 2013 and has a strong presence in Delhi and Bangalore and has
now expanded nationally. It specifically targeted as consumers of Indian origin and urban
class from age group of 20-40 year old who have grown up consuming these flavoured
drinks and are nostalgic about it. This young and vibrant brand has made an emotional
connect it has made with consumers in a short span of time. In the new era of marketing,
Paper Boat has played the game so wisely using engaging content for story-telling that not
only it has made brand awareness but also an emotional contact with its target audience.
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Customer Relationship Management Strategy:

Paper Boat primarily focused on their products rather than focusing on the brand
philosophy. Working on this strategy, the company was able to develop a more customer
centric product. Doing this, the brand got connected with its customers and their lives as it
made them nostalgic with childhood stories.

It mixes emotion (nostalgia) with cognitive point like informing its consumers about the
nutrients and concentration of fruit pulp in its juices which makes the customers trust the
brand.

During summer season months when the demand for juices rise, Paper Boat started direct
engagement with its consumers by placing kiosks in popular supermarkets with high
footfalls to not only give free samples of its products but also talk to them, them their
feedback and encourage
them to try new variants.
This was carried out in tier-
II cities.

Its constant innovation

creates a buzz about it
products and gives its
consumers an opportunity
to explore and experience
something new. This
ensures that they re-
patronize the brand at least
one more time buy trying
out new flavours. But this is
a short-term consequence.

Paper Boat is in constant

touch with their customers through social networking pages be it Facebook, Twitter or
Instagram. Not only do they give timely responses to their customers queries but invite them
to share their memories which are later published on various social networking pages. This
creates positive brand perception and increase customer engagement.

Value delivery through 4Ps:

Product:

Paper Boat has a total of 14 flavours, nine of which are available annually. They are Aamras,
Anar, Jamun, Kokum, Aam Panna, Jaljeera, Imli, Apple, Chilli Guava, Golgappe,
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Litchi, Neermore, Thandai, Ginger lemon tea, Panakam, Rose Tamarind and they are
always in process of introducing new variants. Their innovation in products adds value for
the consumers as they have a b to choose from. The juices contain no artificial colouring or
preservatives, making it authentic.

The unique packaging which is more eco-friendly, lighter, sleek and appealing also makes
it easier for the product to be carried around and store in fridges. The young, conscious
consumers find it more convenient to consume. The bottles are non-breakable and
colourful. They also have cute messages written on the bottom
of the bottle which was discovered by a consumer and delighted
people on social media hence sales hiked.

For family consumption size, it launched a bigger 500ml and 1l

bottles in its popular flavours. It also introduced gift packs
where 3 flavours can be bought at a time, giving monetary
benefit to consumers as well as a chance to try different flavours.

Price:

As Paper Boats mainly competes with non-branded sellers, its prices have been competitive
owing to the nature of the products. The price ranges from Rs. 10 to Rs. 35 for 250ml bottles
and up to Rs. 100 for bigger packages. This pricing strategy appeals to consumers based
on their need to purchase and gives them a choice of how much they want to spend. Also,
Paper Boat follows a differential pricing model, i.e., selling the same product for different
prices at different places and hence catering to all segments.

Place:

Paper Boat is available in retail stores and supermarkets where it is convenient for
shoppers to discover the product and purchase. The brand is available on more than 20,000
retail outlets having tie-ups with coffee chains like Barista, airlines such as Indigo and Jet
Airways and hotels such as Westin and Trident.

Promotion:
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Paper Boats promotion is done through print as well as digital channels including
newspapers, social media and most importantly by positive word of mouth promotion. Paper
Boat got their customers to share their childhood
stories on social media which made them associate
Paper Boat drinks with their childhood. It created an
emotional value for them.

It released Float a Boat campaign on digital

platform and it engages in personal connection via storytelling on Hope, the Boat TVC
campaign. It shows its variety in product lines and also evokes nostalgic points which
increase product value for the consumers.

It also offers discounts, value combos and free samples to the consumers which creates a
price value as well as makes them try new variants. It uses personal selling and public
relations to increase brand awareness and visual merchandising it also employed.

Quality, Loyalty and Satisfaction:

Paper Boat uses natural ingredients and tries to source

them form organically grown farms. The fruits they use are
naturally ripened and their juices contain more fruit pulp
than any of their competitors. The process happens in
temperature controlled units to avoid spoilage and they
are also trying to lower their sugar content as they are
targeting Paper Boats drink to be healthy. It uses traditional
ingredients that go through quality checks.

It is still building it brand loyalty base. It tries to increase loyalty by introducing new
ethnic flavours and is also introducing regional flavours to appeal to regional customers. The
free samples and gift packages are also aimed at enhancing loyalty.

It is focusing maximum on Aamras which is one of their best flavours, being a thick juice
and made up of 45% to deliver satisfaction. Aamras is close to Indians hearts and has more
competition in the market. It follows interactive communication and takes periodic
feedbacks to measure customer satisfaction.

In fact, they introduced bigger packaging units based on

the feedback they received from their consumers. This goes
a long way in building loyalty and delivering satisfaction.
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Survey about Quality and Value Satisfaction:

Paper Boat is a relatively young brand, being only 4 years old but it has already
spearheaded into the market under its category. Most of the people in urban cities with more
than average national disposable income are aware of the brand. In a survey conducted
among 20 respondents, only 36% of them have bought a non-carbonated drink with the
intention of buying Paper boat brand. It is still a pretty decent number for the brand but it
still has a lot of scope in converting occasional users into loyal consumers.

Satisfaction of a food product depends on its taste and the responses about its taste are quite
varied. 18% of the people said its the best while the biggest chunk, i.e. 4% said it was
average. 4% also said that it was bad. Thus Paper Boat also has needs to improve its taste to
appeal to the mass, considering similar drinks can easily be made at home. Only this will
push the value satisfaction. It needs to resonate with the consumers tastes.

In terms of its prices, Paper Boats is fairly priced according to 68% of the people. 18%
also claimed that while they think it is slightly overpriced, they dont mind paying for it as
its a quality product. This reflects that Paper Boat is winning the pricing game and is
deemed as a quality product.

The words that are most associated with the brand are refreshing, authentic, tasty and
quality-oriented. This reflects its personality and that the brand communication has been
effective to a high degree.

Talking about brand preference which is a result of loyalty and satisfaction, 23% said that
they will prefer Paper Boat over its competitors. 19% said they will buy Paper Boat if their
preferred brand is not available. But almost 45% said that they will buy a Paper Boat if they
are in a mood of a traditional drink. This shows that Paper Boat has created brand awareness
in the category it wanted but still has to satisfy its customers and encourage first-time
users.