tutorial 6 - montreaux chocolate
TRANSCRIPT
Strategic Marketing – SUMMER SCHOOL 2014 1
Are Americans ready for dark chocolate?
Tutorial 6: Montreaux Chocolate
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The Extended Marketing Mix
4 + 3 = 7
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Service vs. Product
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And innovation diffusion
Product Life Cycle
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• Assessing ideas: Risk vs. Return
Where do good ideas come from?
New Products and New ideas
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CASE INTRODUCTION
What do you think about the case?
What are the important pieces of information?
What are the important issues?
What are Raymond’s expectations of Torres?
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• $54.4 billion in sales (6.32% profit)• Culture of innovation and NPD• Exclusive rights purchased from Montreaux Chocolate
Company in June 2011– NPD delegated to Consumer Foods Group
• Learning from original Swiss manufacturers– Swiss Engineer assists Andrea’s team for 2 years
• Targets by end 2015:– National distribution– $115 MM in annual sales– 0.60% market share
Apollo & The Chocolate Factory
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• Chocolate = 52.6% of 35B+ confectionary market – $17,664 US chocolate sales
• Annual growth of demand at about 2 to 2.8%• Lancaster Company and Fishers Inc control ~ 70% of
chocolate market • 4 key product segments
– 3.5 oz+ bbb (100g) 7,149 million
– Seasonal chocolate 4,407 million
– 3.5 oz- bbb 3,479 million
– Snack-size chocolate (<0.6 oz) 2,522 million
• Mass market (80.3%) and premium (19.7%)• Target market: 45+, female, married, children, $50,000+
income, college educated
Market Facts & Trends (1)
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Market Sizing
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• Premium chocolate through mainstream channels• Dark chocolate sales rising due to alleged health benefits• Low-calories options face increasing demand• Stand-up pouches and bigger sizes• New labelling
– Portion control– Sharing– Save a piece for later– Me-time
• Higher prices due to commodity costs • Older consumers eat darker chocolate
Factors Affecting Demand
Market Facts & Trends (2)
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SUMMER SCHOOL 201410
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• 45 ideas 12 selected 5 survivors 3 winners• Idea generation• Bases Idea Screening Test (4/12 criteria)
– Distinct Proposition, Attention Catching, Need/Desire, Advantage • Bases Snapshot Concept Test (1 and 2)
– Project team tasters– 8 focus groups to fish out best options– Second based snapshot concept test
• 200 consumers per concept do online review• Bases II testing: internet survey: trial interest
– Average results 23% definitely, 40% probably
Describe the Process
New Product Development
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MONTREAUX: LOOKING AHEAD
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• Product – Taste, ingredients, cacao-level,…– Size (how many ounces?– Packaging (bars, squares, bags…)– Name (European heritage, own brand or new brand?)– Labelling (what aspects of content must be listed?)
• Place?• Promotion
– Advertising & promotion budget?– Where to spend money?
• Price– $4.49 or not– Subject to fruit type?
Key challenges (1)
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Marketing Mix
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Operational
Production capacity• Plant building (are there alternatives?)
– How risky is this investment?
Learning• Expertise development• What happens when the Swiss expert leaves?
Key Challenges (2)
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Additional Research
Online Survey
+ low cost
+ fast response
+ no geographic constraints
+ design flexibility
- limited sampling
- no interviewer
- random replies
Focus groups
+ visible/audible reactions
+ high interaction
+ physical contact (a.o. taste) with product
+ Follow-up questions
+ other ideas expressed
- limited # opinions
- ~ participant / moderator
- costly and time-intensive
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– In-test market– In 2 to 4 nationally representative cities– Educate sales force– USD 3 million– > 1 year– Final introduction > 3 years after acquisition– Competitor risk (alternative could reach market first)
– Further product testing– Regional roll-out– National Launch– Expertise development– Production Capacity
What are the next steps to take?
Key Challenges (3)
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- Global confectionary market: $157,640 M in 2011 (3.2% growth)
- Strong growth expected up to at least 2016- 22.6% of market is USA ($35,648 M)- Chocolate retail sales in USA: $17,664 M
- Expected growth of 2% per annum up to at least 2016- Growth is driven by innovation
Is there room for a new taste?
VIDEO: Malcolm Gladwell and Spaghetti Sauce
What does the market look like
Chocolate Confectionary
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How can Apollo differentiate itself from the rest?
• Taste• Targeting• Experience• Consumption patterns• Health• Quality• Sizes
What are the most salient issues?
Chocolate Confectionary
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Q1: Are the forecasts realistic or need they be challenged?
Q2: Is there a need to flex the budget to launch successfully?
Q3: What drives consumer adoption?
– Consumer Attitudes • Chocolate has strong fan base: for many no substitute exists• Improve retail experience
– Usage• When, where and why
– Benefits• Imagined and real
Some questions to think about…
Viability of New Product
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