India had its first taste of chocolate in the 20th century when European confectionery brands like Cadbury and Nestle entered its chocolate market. Although they were sold for Rs.5 and below, they were still viewed as a luxury good among Indian families. Yet Italian chocolate manufacturer Ferrero Rocher entered India and built its very own empire of a premium chocolate market. It made a name for itself in the market with only one product, which became India’s most liked chocolate laddoo.
The Rocher chocolate is the only product that marks the brand’s name in a market that it created and became king. Earlier and even for a while after its launch, the brand did not engage in any intensive marketing or celebrity endorsements. Still, it became a formidable competitor to Cadbury, ranging between Rs 100 and Rs 175 per box. But how did Ferrero manage to melt the hearts of Indians with its Rocher boxes (12 chocolates per box) priced at Rs.300 each?
The Starting Point
Rocher chocolates first made it to India in 2007, then came the children’s favorite egg-shaped goodness of chocolate and toys, Kinder Joy, in 2009 and Tic Tac. With an investment of Rs.230 crore, the brand opened a factory in Baramati, Maharashtra, in October 2011 and then spent Rs 500 crore for growth. This factory produces 20 million Tic Tac pallets and one million Kinder Joy eggs. Although Rocher chocolates are still imported, the company eventually grew to manufacture half of its products domestically in India as its Asian hub. Now, it exports half of its domestic manufacturing from India, which serves as its Asian hub.
Cultural Influence that Moved the Sales
According to Luigi Oddone, the India head of Ferrero, the company chose Chennai as the location for its branch office due to the vast amount of diverse culture present there. On the other hand, he observed that Kerala seemed to have an interest in experimentation. Luigi also saw that there were two different kinds of crowds in India and related it to the speed at which the brand's chocolates were sold. One moved more quickly while the other moved within a short distance.
No Marketing Technique But Getting Straight into the Market to Understand Consumer Buying Behavior
In a price-conscious market such as India, Luigi learned that there was a segment willing to spend Rs.300 on a chocolate box in 2004. Back then, Ferrero started to test out its marketing, but it did not engage the services of any market research organization. Instead, the leader made sure to get down to the market to understand Indian consumers. Oddone saw how it benefitted in two ways. Not only was the leader able to realize that a bunch of Indians were open to buying an expensive box of chocolates, even if it was sold in a Kirana store. The other was that consumers would buy expensive chocolates mostly during festivals when they generally gift sweets.
Selling Premium Chocolates in Kirana Stores
Luigi distributed Rocher chocolates year-round in retail establishments like Food Bazaar; however, kirana stores mostly receive these chocolates during festivals, which take place from October to March. However, the lack of refrigerator facilities made the leader pull back a bit when distributing Ferrero Rocher chocolates to Kirana retailers—at least from stocking more than three or four boxes throughout the summer. He felt that it would otherwise affect the quality of the product and preferred not to hand it out to Kirana stores if it would go stale before selling it to customers.
Despite being sold only during festive seasons, Rocher chocolates still managed to occupy 14 percent of market share in the box chocolate category. While its said that Cadbury Celebrations may have a share of over 50 percent, making it the category leader. But the Rocher's round form and golden wrapping, which resemble a laddoo, have struck a chord with consumers not just in major cities but also in smaller ones.
Oddone’s idea of introducing Ferrero Rocher, a high-end product, into the mainstream market by selling it through Kirana outlets has been a hit.
The Rocher chocolate's success at the Kirana stores not only opened up the market but also attracted other brands to sell their super premium chocolates in these stores as well.
For example, Cadbury debuted its Silk brand in 2010 and Toblerone from parent company Mondelez's international line in 2012. Nestle has introduced its high-end brand Alpino, which sells spherical chocolates that resemble Ferrero Rocher for Rs 30 per piece.
Never Backing Down on the Price
Despite selling luxury brands, Cadbury and Nestle's earnings appeared to be coming from mass-market goods rather than their super premium chocolate types like celebrations, for instance. But if you look at Ferrero, one can make out that it never once attempted to compromise on producing less expensive versions of Kinder Joy and Tic Tac. While most mouth freshener candies cost 50 paise, Tic Tac costs Rs 10. At Rs.30, Kinder Joy is marketed as a healthful product that moms like for their kids since it has more milk than cocoa.
Oddone strongly stated that the brand cannot offer a product like this at a lower price. Around 2014, he claimed that in the next two to three years, there will be 1.1 million retail locations where Tic Tac and Kinder Joy are sold, up from the current 38,000. However, due to a shortage of storage space, Rocher won't be available for purchase in all 1.1 million retailers.
Having made a name for itself in the premium chocolate market, the brand, up until now, has only relied on the Rocher chocolates for its growth. It first made celebrity endorsements in 2022 with actor Hrithik Roshan and Sara Ali Khan.
Roshan’s Love for Rocher
The leader decided to rope in Hrithik Roshan for the brand’s inaugural digital advertising campaign named, ‘Roshan's love for Rocher’ which highlighted ‘style and elegance’ of the chocolate and revealed the star's preference for it.
Choosing of Celebrities
The leader believed that choosing Roshan aptly connected with their unique consumer view on how it would appeal to a particular segment. Luigi felt that an individual with sophisticated taste and a strong emphasis on relationships would be the typical Rocher enthusiast. Roshan was a perfect fit when it came time to choose a face for this specific influencer campaign, and I felt that the actor added a lot of cohesiveness to the overall effort.
But Roshan Wasn’t the Right Fit for Ferrero Moments, Sara Ali Khan Was Instead!
The leader did choose Roshan for Ferrero Rocher, but saw that the actor’s image did not exactly fit with the company's other product, Ferrero Moments. That was when he felt Sara Ali Khan was the right choice to highlight a rising celebrity whose fame hasn't quite reached its pinnacle of achievement. The individual, Luigi, felt that the brand required needed to be cheerful and have strong ties to their family. Sara Ali Khan was that choice. Then, the brand began to prepare the scripts for the commercial and the photo session to highlight these specific features.