3. EXTERNAL ANALYSIS
Innovation:
Internet and web:
• Games = Kinder, Nestle and Cadbury have interactive games for kids on
their website
• About us and ethics
• Cooking and recipe's
• Colourful websites
• Social networking
4. EXTERNAL ANALYSIS
Competitor Analysis:
Nature of competition –
Who are our main competitors?
•
•
•
•
Mars – Key products = Milky way, Mars bar, Maltesers, Galaxy
Cadbury – Key products = Dairy Milk, Flake and Twirl.
Nestle – Key products = Milky bar, Kit Kat, Yorkie, Munchies, Crunch, Smarties.
Ferroro – Key products = Kinder Eggs, Kinder beuno.
Who are our indirect competitors?
•
•
•
•
Haribo -Key products = Haribo starmix, Tangfastics, Supermix, Goldbears, Maom
products.
Rowntree - key products = Rowntree randoms, Fruit pastels, Jelly tots, Fruit gums.
Swizzles Matlow – Key products = Drum sticks, Love hearts, Refreshers, Parma
violets.
Walkers – Key products = Walkers crisps, Sensations, Doritos, French Fries, Quavers,
Monster munch.
5. EXTERNAL ANALYSIS
Economic environment:
•
•
•
•
•
•
•
Confectionary traditionally recession proof
Annual growth of confectionary market hovers around 5%.
Volume in sales grew by only 0.9%
Household disposable income has increased but so have the costs of living.
Over the past 5 years inflation has remained above the Bank of England's target of 2%
Unemployment increased in 2012 with 1.5 million claiming job seekers allowance
UK confectionary market recorded a 14% increase in sales to reach £3.7billion
• Forecast =
• As the economy picks up so will sales - pushing up the confectionary market
• Based on inflation hikes and pace of innovation Mintel expects value growth in
confectionary market to reach £4.2 billion by 2017.
6. EXTERNAL ANALYSIS
Demographic Environment:
• Population has grown year on year since 2008. In 2011 there were 63.2million residents
in the UK.
• 25-34 year olds and 35-44 year olds are the two most likely groups to buy chocolate on
impulse. The two biggest groups with children.
• People aged 0 to 14 years old are expected to rise by 9% from to 12 million by 2033
Regulatory:
• The Food Safety Act 1990(as amended). Enforces food safety provisions.
• The General Food law Regulation 2002. Aims to protect consumers and establish their
rights.
• The Association of chocolate, biscuit and confectionary industries of the EU. And The
Food and Drink federation.
7. EXTERNAL ANALYSIS
Infrastructure:
•
•
•
•
•
Main sources of cocoa are West Africa, Latin America and South East Asia.
Nestle, Mars and Mondelez control 40% of the global cocoa supply.
Transport is usually provided by a 3rd party company.
Advertising is also usually carried out by a 3rd party.
Main media advertising expenditure on confectionary has increased by 3.6% to £100.8
million.
• Expos and conventions are becoming more popular. Such as the Sweet and snacks
expo and the International food and drink event.
• Our main competitors have Facebook and Twitter
8. EXTERNAL ANALYSIS
Partners:
• Suppliers being abroad may present a challenge.
• Toy manufactures.
• 3rd party advertising agencies and logistical firms.
Socio-Cultural Environment:
• Constant changes in beliefs. CSR is much more important especially in food inudstries.
• Mars have pledged to purchase their cocoa supply from sustainable sources by 2020.
• Mondelez announced it would be investing $400 million into cocoa farming
communities.
• Nestle have made Kit Kats Fair Trade.
10. MARKET ANALYSIS
Size and Growth of overall market:
• UK chocolate confectionary market recorded a 14% increase in value sales between
2007 and 2012 to reach £3.7 million.
• Rising prices have been the main driver of value growth, and chocolate has an
‘affordable treat’ status that is well placed to support future demand.
• Mintel forecasts a value growth in the chocolate confectionary market of 15%
• Sales of chocolate confectionary increased by approximately 5% between 2009 and
2010.
11. MARKET ANALYSIS
Total UK retail volume of sales
Total £m
% Annual
change
Total M (kg)
% Annual
change
2006
3,190
Na
427
Na
2007
3,390
+5.9
427
0
2008
3,461
+1.8
428
+0.2
2009
3,554
+1.6
403
-5.8
2010
3,732
4.1
402
• Volume of sales is increasing
in the chocolate
confectionary market.
Whereas the volume of
products in Kilograms is
actually decreasing.
-0.2
Best and Worse case forecasts for UK value of chocolate confectionary
Worse-Case
(Forecast)
£m
% Annual
change
Best-Case
(Forecast)
£m
% Annual
change
2012
3,733
+2.2
3,733
+2.2
2013
3,652
-2.2
3,986
+6.8
2014
3,731
+2.2
4,108
+3.1
2015
3,826
+2.5
4,259
+3.7
2016
3,921
+2.5
4,418
+3.7
2017
4,013
+2.3
4,577
+3.6
• In the worst case scenario
sales have a steady
increase year of year at
around 2.2%
• In the best case scenario
sales will increase year on
year around 4%
12. MARKET ANALYSIS
Cadbury: Market share = 34%
Strengths:
• Market leader in the UK and renowned worldwide
• Easily distinctive from other brands
• Positive perception surrounds the brand with strong consumer loyalty
• Dairy Milk is the most consumed chocolate in the UK
• Strong parent brand
• Strong R&D and innovation
• Wide product portfolio
• Over 71,000 employees
Weaknesses:
• A few controversies surround the brand
• A few instances of product recalling – dairy milk caramel
Market Share
23%
34%
Mars: Market share = 26%
Strengths:
•
Globally recognised with a strong product portfolio
•
Around 70,000 employees
•
Strong customer loyalty
•
Strong financial power
Weaknesses:
•
Protest from vegetarian people over use of animal rennet
Nestle: Market share = 17%
Strengths:
• More than 140 years in the industry
• Employee strength of around 328,000
• Wide product range
• Own several popular brands like Boost, KitKat, Haagen-Dazs
• CSR activities
Weaknesses:
• Limited market share
Cadbury
Mars
Nestle
17%
26%
Other
13. MARKET ANALYSIS
Competitor Analysis
Leading brans sales and shares in UK chocolate confectionary market 2013
Market Share %
Sales £m
Cadbury Dairy Milk
(Mondelez)
13
495
Galaxy (Mars)
7
267
Maltesers (Mars)
4
155
KitKat (Nestle)
4
145
Mars Bar (Mars)
3
123
Snickers (Mars)
3
115
Thorntons (Thorntons)
3
108
Quality Street (Nestle)
3
97
Twirl (Mondelez)
3
95
Aero (Nestle)
2
94
Celebrations (Mars)
2
93
Wispa (Mondelez)
2
89
M&M’s (Mars)
2
75
Roses (Mondelez)
2
68
Milkybar (Nestle)
2
66
Own-label
5
196
Other
40
1,491
• Shows the spread of leading
brands and how companies
like Mars have several
dominant brands.
• Shows a large gap between
Diary Milk and Galaxy
15. SWOT ANALYSIS OF THE MARKET
Strengths
• Wide variation in price - giving us more price discretion
• UK is one of the major markets in terms of global per-capita
consumption of chocolate confectionary
• Seasonal occasions boost sales of chocolate in particular
Easter and Christmas
• Confectionary is very popular among children and this is likely
to continue into the future
Opportunities
• Limited-edition products help generate sales
• Promotional activity or new packaging can boost sales,
especially when timed to coincide with specific seasonal
occasions
• Social networking has become increasingly popular.
Weaknesses
Threats
• A large amount of investment is necessary by companies in
order to retain a strong brand presence and encourage
impulse purchases
• Launching new products in the confectionary market can be
financially risky as new brands have to compete with large preexisting brands with lots of power.
• Market is subject to strict legislation as being part of the food
industry
• During the recession supermarkets began to introduce their
own cheaper ranges
• Rising input costs have increased retail prices threatening
chocolates low-price indulgence image
• In order to combat these prices consumers have reduced
the size of their products but kept the same price – which is
unpopular with consumers.
17. TARGET MARKET
Target market profile:
The consumer:
• Our product is aimed at children aged 2-13 of both genders
The buyer:
• Children obviously don’t have purchasing power and therefore we target the adults
to make the purchase on their behalf
• Lifestyle = Parents who are looking to spend quality time with their children
through activities such as baking cakes. Parents who are active on parenting
networks and forums.
• Media Habits = Parents who are active on social networks and modern media
platforms such as YouTube to keep up with our promotions
• Purchasing Habits = Parents who shop with their children and give the incentive of
buying our chocolate to control their behaviour. Impulsive buyers.
• Parents who want to play with their children in creative ways rather than just
sitting in front of the TV. We want parents who are almost ‘big kids’ themselves but
have enough responsibility to care about their health and safety.
18. TARGET MARKET
Segmentation justification:
Geographic:
• UK is the 7th highest consumer of chocolate in the world
• 660,900 tonnes are consumed a year
• An average of 11kg per person per year
• 3 bars a week
• UK chocolate industry worth £3.96 billion (Mintel 2012)
Demographic:
• Population in the UK is 63 million and growing
• Primary consumer of chocolate are the 25-54 year olds who consume 41.2% of the
chocolate in the UK market. This age range is the most likely to have children to
buy and share chocolate with
20. POSITIONING
How are we differentiating?
• Focus on building a community with our customers and involving them heavily in the brand.
Constantly talking to customers at every possibility
• Focus on innovation and creativity.
• Using social and modern media to constantly express our innocent and innovative image such
as creating animated cartoons of our characters and distributing it via websites such as YouTube
and Facebook.
• We don’t want consumers to just view our brand as chocolate sellers. We want to be seen as a
caring, innocent and creative community to try and create loyalty and strong relationships
Positioning maps:
22. MARKETING MIX
Distribution channels:
• Our main distribution channel will be through retailers. In particular supermarkets
Producer
Retailer
Consumer
• Sales of confectionary are dominated by the supermarkets. The products are best
tailored to this environment such as the multipack formats
• The total weekly expenditure of confectionary in large supermarkets is £34million
and accounts for 61.8% of total expenditure compared to other outlets
UK supermarket retailers by share of the total market (%)
2010
Tesco
30.7
ASDA
17
Sainsbury’s
16.4
Morrison's
12
Waitrose
4.1
Aldi
3.0
Lidl
2.4
Iceland
1.7
Somerfield
1.0
Others
11.7
• The top four supermarkets
account for 76.1% of the
market
• We should look to sell through
Tesco as they are the market
leader and therefore would
maximise our sales potential
23. MARKETING MIX
Pricing
•
•
•
•
•
We would like to charge 59p
Not the cheapest chocolate on the market so will create a small hint of exclusivity
Cheap enough to not put off parents from a purchase
Psychological pricing – slightly undercutting 60p sounds cheaper
More price discretion due to general inelasticity of the chocolate market – which is
a bonus because it is likely we will have to increase price in future due to rising
input prices
• From a marketing perspective our objective for setting this price is to improve our
market share and build a reputation early in our life cycle by enticing customers in
• General unit cost = 10p plus toy around 6p will mean around a 43p profit per unit
• Possibility of multi-pack with 5 bags of chocolate for a price of £2.59. Saving the
customer 50p. And gives us a profit of £2.15
24. MARKETING MIX
Brand
•
•
•
•
•
‘Chocomonsters’ - An army of Chocomonsters
Bags of chocolate with fun sized monster shaped chocolate
Inside packet comes a free monster toy from the Chocomonsters universe
Start with 15 different monsters to collect and expand from there
Everything is monster themed – Fun animations posted on social media and our
website for kids to watch, interactive games for kids to play involving monsters
• First competiton posted on our Twitter involves kids sending in their drawings of
monsters and we can turn them into characters. This will spread word of mouth
quickly and establish our brand with parents and shows our creative and interactive
sides early
• Heavily involved with community. Animations can be fan made or by students this
will bring down costs but create a sense of community
• Each packet will contain fun facts about different monsters from the
Chocomonster universe
25. OBJECTIVE'S
• Break-even by December 2014
• 2% market share value by December 2015
• 1,500 Twitter followers by December 2014
Evaluation mechanisms:
• Measure finances to see if we have broke even by December 2014
• Market share evaluation to see if we have a 2% market share in value by December
2014
• Measure the Twitter follower count as a way of measuring brand awareness and
loyalty
• Customer feedback to see if they perceive the brand in the way we have outlined in
the presentation
26. BUDGET
Marketing budget 2014
Advertising:
Website
£20,000
Social media
£45,000
Online advertising
£100,000
TV advertising
£200,000
Trade shows
£50,000
In-store promotion
£50,000
Print advertising
£100,000
Market research:
Customer feedback
£25,000
Primary research
£50,000
Secondary research
£50,000
Administration:
Office
£100,000
Telephone
£5,000
Necessities
£3,000
Personnel
Wages
£300,000
Travel
£25,000
