Analyse Nutella free essay sample

Southerners along with wealthy/successful individuals and elders (targeted for Original Nutella chocolate hazelnut) By implementing our marketing plan, we hope to achieve several goals and objectives within 3 years: ? Improve brand awareness ? Become leading general spread and breakfast in the U. S. ? Achieve greater market share by 35% increase in profits. We will use a differentiated strategy to position ourselves as the leader in the breakfast market by emphasizing out uniqueness, as well as our excellent quality through our taste, and through the positive image and high prestige of our company name. Moreover, we will focus our marketing efforts on shelving Nutella in an eye-catching spot in supermarkets, as well as advertisements on the radio, television, newspapers, and magazine. Also, our sale promotion will include samples and coupons. 1. Situation Analysis 1. 1 Macro environment Situation Nutella 3 Economic ConditionsIn times of economic recession, people are less willing to spend money on shopping goods like chocolate spreads. We will write a custom essay sample on Analyse Nutella or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Nevertheless, Americans are always looking for a â€Å"good deal. That’s why; we will price Nutella and its extensions at the most economical value and price for consumers as possible. TechnologicalModern technology can help in production of Nutella by making it more efficient and effective. As a result, Nutella can be price lower to serve the target market. Social and CulturalIn today’s society in the U. S. , life in general is very fast passed. Thus, people are looking for more convenient products. In addition, there is a growing concern and awareness about a healthy diet. According to a survey taken by 100 people who were told about Nutella and asked if they would try it and the overwhelming majority that said that they would not try Nutella said that it is because chocolate is an unhealthy and bad way to start your day with (please refer to the survey in the appendix). Nevertheless, we will emphasize that Nutella is in fact nutritious and contains vitamins and minerals from several ingredients like skim milk. DemographicsAs â€Å"baby boomers† are reaching senior status, many of them are living longer and spending lots of money on luxury items, entertainment, and travel. Therefore, we can take advantage of this growing trend, especially with Original Nutella chocolate hazelnut, to market our product, and encourage sales. 1. 2 Market Situation The producer of Nutella is the Ferreo Company, which is a private company in Italy. The group is headed by Ferrero International from Luxembourg, â€Å"has sped up its propensity for advertising investments and structure. For the second consecutive year since the beginning of the 1960’s, Ferrero has suffered a slowing down† (www. dowjones. com). Using the Boston Consulting Group (BCG) approach, Nutella is more like a â€Å"question mark† right now, that is trying to become a â€Å"star. † Ian another words, Nutella has a somewhat Nutella 4 high market growth rate with a slightly high market share. A question mark is basically defined as â€Å"a company with low-share business units in high growth markets. † Besides, they â€Å"require a lot of cash to hold their share† (Principals of Marketing: 54). The red circle below denotes approximately where Nutella is currently and the Blue arrow denotes where Nutella want to go. Market Growth Rate Star Question mark High Cash cow Dog Low High Low Relative Market Share Using the General Electric strategic business-planning grid we can show that Nutella has a high-Medium industry attractiveness and a strong business strength. In the chart below Nutella is denoted by the black circle. This suggests that Nutella should invest and as a result it will grow. The GE approach considers â€Å"[the industry attractiveness index, [determined by] market size and growth, industry profit margin, amount of competition, demand, and industry cost structure (Principals of Marketing: 55). Business Strength Strong Average Weak Nutella 5 High Industry attractiveness Medium Low Invest and Grow Maintain Investment Harvest or Divest Nutella 6 1. 3 Competitive Situation Key competitors for Nutella and its product extensions are listed below: TWIST: is a â€Å"real Dutch chocolate† it is banana flavored milk chocolate spread imported from Holland. It is manufactured by De Boer food Importers, Inc. ? We don’t believe that Twist will have a significant impact on our company, because Nutella and peanut butter swirl’s such high quality taste, nutrition, and natural ingredients. In addition, they do not have high arket share or sales in the U. S. or world market. Strengths ? ? ? ? ? Low price ($1. 99) Weaknesses Low company name and brand awareness Artificial flavoring Not as nutritious as Nutella Not advertised much MILKY WAY: is a chocolate flavored spread imported from Poland by master foods Polsa. ? Milky way is not very well known by the world or U. S. market. Also the company; Kozuszki Parcel is not well known. In addition, the product is not selling well and has very little awareness and market share. Strengths ? ? ? ? ? Slightly bigger jar than Nutella’s Weaknesses Low company name and brand awareness Artificial flavored chocolate Not advertised much On average priced . 60 cents higher than Nutella. JIF: is a peanut butter. ? Originally a product of Crisco and Proctor and Gamble, now is part of the Smucker Company. Jif is the top selling peanut butter in the U. S. with significant market share and sales. Nutella 7 Strengths: ? ? ? ? ? ? ? All American breakfast Well known brand name and awareness Lot’s of advertisement Priced on average two dollars less than Nutella Weaknesses: Not unique Not as healthy as Nutella Not very versatile ? Nutri-grain bars might have a potential impact on the sale of Nutella bars. Not only is Nutri-grain one of the top selling breakfast bars in the U. S it is very well known, and might pose a potential threat to Nutella bars. It is also manufactured by Kelloggs, one of the top breakfast companies in the U. S. STREANGHTS ? ? ? ? Well known brand and in U. S. market Very healthy, specially for breakfast NUTRI-GRAIN: are cereal bars with whole grain oats, wheat, and fruit. WEAKNESSES In general does not taste as good as chocolate or Nutella Not unique 1. 4 Target Buyer or End User Situation Our target buyers will include, children between the ages of 4 and 13 and their parents, college students, and southerners and wealthy or successful Americans and elders. As Nutella 8 discussed in detail in the market segments and target analysis these groups will be target further buy their: ? ? ? Demographics Psychographics Lifestyles In addition their wants, needs, attitudes, and perceptions are define in detail in the market segments and target analysis in section five of this marketing plan. It is important to point out that many of our target consumer markets are growing in the U. S. Children between the ages of 4 and 13 make up over 6. 5 million of the U. S. population (www. census. gov). In addition, seniors are growing because of longer life span to a whopping 26 million of the U. S. population (www. census. gov). Nutella 9 1. 5 Product Situation So, how is Nutella doing presently? SALES Gross profit: 1,200,000 Net profit: 610,000 PROFITS Decline in profits from 1997 to 1998, from 1,346,189 to 1,392,000 TURNOVER RATE: 3. 3 percent Distribution trends and development Nutella is available on-line at www. nutellausa. com and www. yahoo. com amongst others. In addition, Nutellas web cite offers a store locator for U. S. consumers. Evidently Nutella is available at all major supermarkets nation wide. From our research, we discovered that Nutella is available in all major supermarkets in southern California and other major cities around the U. S. including: Food-for-less, Alberson’s, Vons, Ralphs, and Pavilions. Marketing spending history In recent years, Nutella has been getting increasing promotions. For example, currently, Kobe Bryant of the Los Angeles Lakers is featured on the Nutella jar with his favorite recipe. In addition, there is a contest to win season tickets to Lakers games. Moreover, in 1998 the â€Å"Got milk? † campaign gave away goodie bags containing of sample size products and inserts from various products including Nutella (www. dowjones. com/ptg. djnr). After the program, a research was conducted that revealed that Nutella â€Å"showed a 75 percent increase in product sale in participating stores during the sampling event, as well as a sustained 25 percent increase the month following the promotion† (www. dowjones. com/ptg. djnr). 1. 6 Distribution Situation DOMESTIC MARKET Risen by 2. percent Nutella 10 VOLUME Risen by 6. 7 percent GROWTH POTENTIAL ? Growth of sales volume is the result of growth of praline and snack divisions, as well as Estathe and Nutella products world wide, specifically in Europe (www. dowjones. com/story_clean). ? Great success of other Ferrero products in the U. S. yield a strong potential for growth of Ferrero company as a whole, as well as Nutella and its product extensions. ? So, Nutella bars and Nutella and peanut butter swirls have very strong potential to raising profits and market share for Ferrero in the U. S. Nutella 11 2. SWOT Analysis Summary 2. 1 Internal Analysis Summary 2. 2. 1. STRENGTHS ? Nutella has captured the European marketNutella is already the leading breakfast spread in Germany, and a popular after-school snack in France and Italy. Nutella is to Europeans what peanut butter is to Americansa tradition. Europeans love Nutella and have it with everything. It is widely available everywhere. However, Nutella has not been as popular in the US. ? Product is positioned as unique and of high-quality in taste and nutritionNutella is a very unique product in the U. S. and is of high quality. It has a one of the kind taste that is very delicious. There are not many chocolate hazelnut spreads from Europe available in the U. S. There are a few imitation brands, but Nutella is the original brand that has been available in the US for 15 years. Nutella is a high quality product with fine ingredients that offers nutrition as well as taste. ? Broad appeal to many market segmentsNutella appeals to a wide variety of people, not just specific segments. Most people like to have various spreads like: peanut butter, jam, chocolate, hazelnut, and banana, on their breads to add flavor. Nutella appeals to so many different segments ranging from children, to upper middle class mature adults. However, these different segments can be recognized and targeted differently because different groups react differently to different marketing mixes, promotions, and advertisements. Since Nutella appeals to so many people, they do not have to depend only on sales from a small market; there are many profitable opportunities. ? Variety of consumption methodsNutella can be eaten in a variety of ways on many different things- it can be eaten on bread, donuts, bagels, crackers, fruits, anything! There are several recipes that can be made from Nutella as well. It is a versatile spread put on anything that needs some Nutella 12 flavoring. It can be personalized to the way the consumer wants it. Therefore, the customer is more likely to be satisfied with the product. ? High company awareness from other popular brands (Tic Tac, Rocher)Many people already know about other brands that Ferrero makes like Tic Tacs, Kinder Surprise Eggs, and Rocher candy. Tic Tac is very popular in the US and advertised well on television. If Nutella is linked with Tic Tac somehow through price bundles or joint advertising, Nutella brand awareness can increase. Also, if one brand has a good name, it can have a good effect on another brand from that same company. 2. 2. 2. ? WEAKNESSES Low Nutella brand awareness in the USMany people do not even know what Nutella is in the US. Results from surveys taken at CSUN show that not many people are even aware of the product. The select few who have heard about it, do not really know much about it. If Nutella were better known more people would probably be willing to buy it. It should be advertised on Nutella 13 television and with coupons in supermarkets. Television ads would really increase awareness because there are so many Americans who watch television. ? Not advertised wellNutella has not been advertised well in the US. No advertisements of any type have been made besides the Kobe Bryant pictures on the jar. However, these Kobe Bryant ads don’t really help because people have to find Nutella first before they realize that Kobe Bryant is associated with it. There are a few ads in sports magazines, but this is only reaching a small portion of the US market. Nutella needs to be widely advertised with television commercials and in-store samples, promotions, and coupons. If Nutella is advertised better, sales will most likely increase because Americans will be more aware of the product. ? Higher price than peanut butter competitorsNutella is priced higher than its biggest competition in the US- peanut butter. Peanut butter is a long-standing tradition in the US, so Nutella should kept its price comparable to peanut butter. Many Americans will not pay more for Nutella over peanut butter unless they are convinced that Nutella is somehow better and of higher quality. If Nutella wants to keep their high price, they rally need to convince the American market that it is worth that price. Nutella must emphasize their uniqueness and high quality to the market. Buyers must become loyal to the Nutella brand, so that price does not matter because they must have the product. ? Not placed on shelf in eye-catching spotNutella is not really placed on the shelves in an eye-catching spot. It is placed right next to its biggest competition, peanut butter. This is not a good place for it to be shelved because most Americans would just buy peanut butter without even looking for Nutella. Also, Nutella is usually placed down low or in a spot not easy to find. If it paid stores to put it in a better spot, it would probably sell better. Maybe some coupons placed under it would attract buyers as well. Nutella 14 ? Americans perceive chocolate as being unhealthyFrom the CSUN poll, it was found that many people perceive Nutella as being unhealthy (please refer to Appendix for further data on survey). Since it contains cocoa, Americans think peanut butter is healthier. The thought of spreading chocolate on bread for breakfast every morning does not do much for many Americans. This is not a big part of their culture as it is in Europe. Nutella should advertise to the American market that their product is indeed healthy. The ingredients including skim milk and hazelnuts should be emphasized in the advertisements. 2. 2 2. 2. 1. ? External Analysis Summary OPPORTUNITIES Faster pace of life, less time to cookIt is currently the information age. The pace of life is much faster, especially in America compared to Europe. People have less time to cook in the morning, and want to make something that is quick. Nutella hazelnut spread solves this problem. All one has to do is spread it on bagels, bread, muffins, crackers, anything. It is fast and adds instant flavor to any breakfast. ? Internet usage has greatly increasedInternet usage keeps on increasing and computers are working their way into every aspect of business. Many companies sell products online in addition to their regular stores. This is a big opportunity for Nutella to increase awareness and advertising online. ? Americans watch many hours of TV per week- Nutella 15 When Americans watch television, they are exposed to many advertisements during commercial breaks. Most people find out about products from the ads they see on TV or hear on the radio. This is a big opportunity to advertise Nutella. If some television ads for Nutella are aired, the millions of TV viewers will see these ads and become aware of this product. ? American love of European trendsMany Americans love the European culture. European lifestyles and cultures are portrayed as cool in the media through magazines, TV shows, and European films. Nutella can be seen as a trendy European spread. Those who like Europe and all the things that go along with it should be targeted. Nutella 16 2. 2. 2. THREATS ? High competition from leading peanut butter brandsPeanut butter is a long-standing American tradition. Nutella can set itself apart from the competition with a more-for-more competitive advantage. This can be accomplished by emphasizing Nutella’s variety, quality, uniqueness, and personalization of spread on different foods ? Imitation chocolate spreadsNutella’s popularity has led to many imitation brands trying to outdo Nutella. Many of these brands, although imitations, are becoming threats. Some of these brands are doing well and are trying to get ahead of Nutella. Nutella must watch these competitors to make sure they don’t take over. ? Bad economic cycles / statesPeanut butter and spreads are generally shopping goods. Therefore, during times of economic downturn and recession people will not be as apt to buy peanut butter or special chocolate and hazelnut spreads. Instead, people will be concerned with first buying the necessities like water, fruits, meats, and soup. During economic downturns, advertising must be increased and reasons given as to why it is so important to buy this product. SUMMARY OF SWOT ANALYSIS INTERNAL EXTERNAL Strengths Opportunities S1: Nutella has captures European Market O1: Faster pace of life, less time to cook S2: Unique product with high quality in taste nutrition O2: Internet usage has greatly increased S3: Broad appeal to many market segments O3: Americans watch many hours of TV per week S4: Variety of consumption methods O4: Americans love of European trends S5: High company awareness Weaknesses Threats W1: Low Nutella brand awareness in U. S. T1: High competition from leading peanut butter brands W2: Not advertised well T2: Imitation chocolate spreads W3: Higher price than peanut butter competitors T3: Bad economic cycles / states W4: Not placed on shelf in eye-catching spot W5: Americans perception that chocolate is unhealthy Nutella 17 3. Issue Analysis 3. 1. Critical Success Factors Nutella has four main critical success factors: ? ? ? Establishing more brand awareness in the US with Nutella bars and Nutella and peanutbutter swirls Providing a high-quality product through its taste, and natural and nutritious ingredients Providing a product that is unique Proving a product that on versatile The combination of these three success factors will give Nutella a competitive advantage in the peanut butter and chocolate spread markets. Nutella must be positioned as it is- a highquality tasting and nutritious, unique product. Americans must be aware of Nutella and know that it is a special product that is worth paying a few extra dollars for. We want to emphasize Nutella as a product that is very unique with a taste unlike any other spread brands. Besides, many imitation brands do not even come close to the great blend of taste created by Nutella’s ingredients. Nutella is a unique product that has been around for many the early 1900’s. Thus, Nutella’s attributes will most likely increase sales and market share. Furthermore, Nutella can increase brand awareness in the U. S. with advertisements, and line and brand extensions. 3. 2 Alternatives To make its business even more successful, Nutella can choose from several strategies to implement. These include the following: Nutella 18 ? Market Development: Nutella must develop its American market. Although it has gained great popularity in Europe, many Americans still are not even aware of this product. A concentrated strategy can be used here to segment the American market into a few sub-segments that can be targeted individually. Different advertising themes can be used to appeal to different segments. ? Market Penetration: expand market share in current U. S. chocolate and peanut butter spread markets with radio and television ads, using Nutella promotions linked with other Ferrero brands, and gaining better shelf locations. ? Product Development: create two other types of Nutella line extensions: ? Nutella bars- for those with a busy lifestyle and who do not have much time to prepare meals ? Peanut butter-Nutella swirls and Nutella-peanut butter swirls- used as a transition product to gradually bring peanut butter users to try Nutella. ? First, Peanut butter-Nutella swirls (more peanut butter, less Nutella) will be marketed; then, Nutella-Peanut butter swirls. 3. 3 Evaluation of the Alternatives ? Concentrated market development: Segmenting the various groups of the American market with help Nutella focus its advertising on specific segments. This will have a more lasting impact and affect because the ads will relate more to the target groups. However, this will be more costly than mass marketing because it requires more time, research, and advertising money. Yet it may be worth the extra effort if it makes a more lasting impact on potential customers. Nutella 19 ? Penetrate: Creating and airing television and radio ads for Nutella will increase brand awareness to a great extent. Ads can be costly, but the increased awareness and sales will make up for it. Better, more noticeable helf locations and joint promotional efforts will also increase brand awareness and hopefully market share in turn. ? Product Line Extensions: Nutella bars will bring in an additional source of revenue and create awareness of the original Nutella spread. In addition, peanut butter-Nutella swirls and Nutella-peanut butter swirls will help the company gradually recruit new users from peanut butter spreads to chocolate spreads. The production of the se products is costly, but if awareness and profits increase as a result, and eventually these costs will be canceled out. 3. Recommendations In order to take advantage of the full potential of Nutella, we have decided to try four of the alternatives in the Unites States: Original Nutella chocolate-hazelnut spread, Peanut butter-Nutella swirls, Nutella-Peanut butter swirls, and Nutella bars. All of these three strategies will work well to: ? Increase market share ? Increase brand awareness ? Increase profits It should be noted that Peanut butter-Nutella swirls will be marketed first, then depending on interest and sale of product, we will introduce Nutella-peanut butter swirls about 4-6 Nutella 20 onths later, after which we will promote Original Nutella chocolate hazelnut to this segment (kids 4-13 year old and their parents) as well. Moreover, concentrated market development will increase brand awareness, which in turn can increase sales and market share. Penetration increases awa reness and Product development provides an additional way to gain extra revenue. Nutella 21 4. Marketing Goals and Objectives 4. 1 Nutella’s Mission Statement: Due to their great success in the European market, Ferrero is ready to introduce Nutella to all American people, from various backgrounds, ages, and lifestyles. At Fererro, our primary mission is to introduce Nutella to all people around the U. S. , as being a unique and of excellent quality in taste and ingredients. In addition, we want all Americans to gain confidence that Nutella- the original and most delicious chocolate hazelnut spread in the world- is the best choice for them. 4. 2 Market Definition Nutella- the original and supreme chocolate hazelnut spread in the world- will deliver taste, nutrition, versatility, and convieneince to the American breakfast tables. In addition, both the mission statement and the market definition for Nutella indicates Ferrero’s incentive to introduce itself to the U. S market as a unique product that will promise ultimate satisfaction and excellence to its buyers. 4. 3 Technological Changes Nutella 22 Since Nutella has been produced for many years in Italy where it was first originally made, Fererro the producer of Nutella has all the capabilities to meet the demand with the present facilities. However the fact that we are developing a new market, which is far from our origin, will change the way we’ll meet the demand in the U. S. Besides, the distance that exists between United State and Europe can cause a potential delay for distribution. Also the duration and time period that takes to manufacture the goods to the American market will most likely take a longer time period than needed. As a result, customers might not purchase Nutella products because it might not be available when wanted, which will hurt Nutella’s image and demand of potential customers. Hence, in order to prevent Nutella from these two possible threats, the following options will be concisely reviewed. Option one The first option is to build a factory in the U. S. Presently, Ferrero- the manufacturer of Nutella- produces some of its product in state of New Jersey. But still Nutella is shipped from Italy to Europe. Hence, if a factory is built, it can cut cost and help make the delivery Nutella faster. Although, the factory should be set up so it only meets 50 percent of expected future demand in the U. S. market. The reason for the limitation is to safeguard the investment of a new factory, so that incase of a loss or low demand, the damage won’t be so extreme. Option two The second option could be to improve our delivery as well as communication to our consumers. In order to achieve this alternative we need to improve our time efficiency cost to cost in the U. S. So, we will build a warehouse in five regions around the U. S. The Nutella 23 approximate location of each warehouse will in following cities: Los Angeles, Utah, Houston, Springfield, and New Jersey. Furthermore, a developed computer system will be connecting all of these warehouses to one another. This system will provide a place for inventory, and will serve as a warehouse for distributors and retailers. In addition, this system will be beneficial to distributors and retailers around the U. S. Moreover, this system will be beneficial to those distributors and retailers who have stores in different states, as it will help them receive shipments faster. To sum it up, this system will help us be more efficient and cost effective in distributing Nutella products. Nutella 24 4. 3 Financial Objectives Increase the overall sale by 35% within the first 12 months and 50 percent within the following two years. ? Ferrero will try to increase sale by 35 percent by 2003, and 50 percent by 2005. The first year increase in sales wont be affected by technological changes. ? Nutella’s annual sales has bee estimated to be 1. 2 million a year in U. S. market, which is relatively low compared to overall spreads in the U. S. Allocation of the required funds for our advertising campaign. ? Proctor and Gamble, the manufacturer of Jif Peanut butter spends several million on advertising for an establi shed name brand, which has accounted for its success. ? Accordingly, for Nutella, in order to create strong brand awareness, a similar size budget will be required. We estimate that we will spend approximately between 35-45 percent of our profits on advertising and promotions. Allocation for required funds for improving shipping and handling ? By comparing and contrasting the two options reviewed in section 4. 2, we conclude that the second option- which will help us achieve faster and effective delivery service- will help Nutella be distributed in a more efficient and cost effective way. ? This option will acquire, a great budget estimated to be about $1,368,000 annually for five warehouses. The chart below specifies the costs of 5 warehouses: Nutella 25 Estimated rent per 6000 square feet (Average 8000*12) Estimated direct labor cost [($1200 per month*4) *12] (Four required in each warehouse full time) Estimated administrative expenses (1600*12) Estimated utility Cost (700*12) Estimated Manager Salaries (2500*12) (One per warehouse) Estimated Office Secretary Salary [(15,00*12)*2] (2 per location) Estimated cost of lease truck [(15,000*12)*2] (Two per location) Miscellaneous Cost (800*12) Total Total for all five locations $ $ $ $ $ $ $ $ 96,000. 00 57,600. 00 19,200. 00 84,000. 00 30,000. 00 36,000. 00 16,800. 00 9,600. 00 $273,600 * 5) $ 273,600. 00 $ 1,368,000. 00 Nutella 26 5. Target Market and Positioning 5. 1 Market Segments and Target Analysis Breakfast market in the U. S. The breakfast market world wide consists generally of Jam, Marmalade, chocolate spread, lemon curd, sweet spreads (honey, syrup, and treacle), and peanut butter. To get the statistics for the U. S. market, we have multiplied each number by 50 per cent, since the U. S. generated 50 percent of sales in the world. Percentage up or down Jam Down 0. 05 % Marmalade Down 2% Chocolate Spread Up 5% Lemon Curd Down 1% Honey, Syrup, and Treacle Up 2. % Peanut butter Up 2. 5% Breakfast item Hence, it is evident from the table above that sale of chocolate spread is up by approximately 5% in the America. Accordingly this is an opportunity for Nutella: to become the leader and raise the sales of the Chocolate spread market. (www. dowjones. com/story_clean) Geographics, psychographics, and segmentation. Nutella 27 Target Market 4-13 year olds and their parents College students Income/class Middle-low class Generation Gen. X Echo Boomers NA Middle-low class Southern U. S. Wealthy/Successful Individuals And elders Middle-Upper class NA Benefits Quality Economic Pricing Convenience Convenience Speed Economic pricing Quality Uniqueness As shown in the table above the first target market, the 4-13 year olds and their parents, will generally be targeted toward middle and low class income families, generation X and echo boomers, and will offer benefits such as quality taste and ingredients, economic pricing, and convenience. Similarly, the college students will be targeted for behavioral variables such as convenience, speed, and economic pricing, as well as their income and lifestyle. Finally, the Southern U. S, and seniors along with middle and upper class individuals will be targeted because studies show that they are more likely to have breakfast (U. S. News World Report: 11/97). 5. 2 Target Market Extend the Nutella success to the U. S. Nutella 28 For the most part, Ferrero has captured the European market with Nutella hazelnut chocolate spread. Some of these countries include: Germany, France, and Italy. In general, Nutella has been marketed and has captured kids twelve and younger, as well as adults and teens. Like peanut butter is â€Å"America’s favorite,† Nutella is European’s choice. We propose a plan to expand the market segments from the European market to the United States market. Our goal is to make Nutella an all American Breakfast and convenient spread. Three market and three versions of Nutella Product line extension of Nutella will consist of: ? Original Nutella chocolate-hazelnut spread ? Peanut butter-Nutella swirls and Nutella-Peanut butter swirls ? Nutella bars Target market 4-13 year olds and parents College Students Nutella product Peanut butter-Nutella swirls Nutella-Peanut butter swirls Nutella bars Southerners and elders Original Nutella Wealthy/Successful individuals Chocolate-Hazelnut Children Between 4-13 And Their Parents Concisely, for the children between the ages of four and thirteen along with their parents we will propose a combination of Nutella and peanut butter spread swirls as a transition product. In a recent publishing by The Grocer, it has been detected that â€Å"sales of chocolate spreads and peanut butter [are] healthy, indicating greater parental indulgence in children’s products† (lexis-nexis. com/universe). Thus, with the Nutella swirls we will attempt to offer this group something similar to their traditional â€Å"American† spread (peanut butter). As a result, we predict that this group will like the Nutella chocolate and peanut butter swirls so much, that they will eventually go for a Jar of original Nutella hazelnut spread instead of a jar of peanut butter or Nutella and peanut butter swirls. Nutella 29 College Students Similarly, for the college students, we will propose the Nutella bars. Since most college students are busy and don’t have much time to cook breakfast, Nutella bars will be a great alternative. It is made especially for people on the go who want to have a quick breakfast. Southerners and Wealthy/Successful People and elders Finally, we will target wealthy and or successful individuals along with southern Americans. Statistics show that this group is more likely to eat breakfast (U. S. News 1997). Thus, It is evident that this group has the time and money to have a traditional breakfast. Hence, we will attempt to encourage this group to try and buy original Nutella chocolatehazelnut spread since they can afford the higher price. Also, it is important to point out that elders (seniors) are living longer, and consuming luxury or shopping goods, which Nutella fits into. Nutella 30 5. 3 Positioning Differentiation strategy approach In trying to implement our plan, we will take a differentiation strategy approach. Not only is the maker of Nutella, Ferrero a well-known and top company world wide, it is especially regarded for its prestige and line of fine products, such as Rocher, Tic Tac’s, and Kinder- eggs. Similarly, Nutella’s position is based on its: ? Uniqueness ? Excellence in quality through our ? Great taste Notoriousness ? Convenience and Versatility In addition, the different lines of Nutella: including the original Nutella-chocolate hazelnut spread, the Nutella and peanut butter swirls, and the Nutella bar appeal and meet the specific wants of each market segment. Furthermore, we predict that Nutella will be a chocolate spread market leader in the United States as it has been in Europe. F urthermore, to paint a more clear picture we have demonstrated Nutella’s position as compared with Twist and Peanut butter on various characteristics. Nutella 1 Nutella=red V= Versatile Twist=blue U= Uniqueness Peanut butter=green N=Nutritious D= Delicious Fig B-1 UV NUTTELA TWIST PEANUT BUTTER Fig B-1 When we compare Nutella with twist and Peanut Butter we will position Nutella as a more versatile and more unique product compare with its competitor U V Fig B-2 TWIST NUTTELA PEANUT BUTTER N Fig B-2 Since Nutella has been positioned as a more nutritious product compare to its competitors. In here we place Nutella higher compare to Twist and Peanut Butter Nutella 32 V Fig B-3 TWIST NUTTELA PEANUT BUTTER D Fig B-3 This Graph shows Nutella as a more versatile product compare to its competitors twist and peanut butter. Also Nutella has been proved to be more delicious and for this reason we place Nutella in a higher place. Nutella 33 6. Marketing Mix 6. 1 Product Mix Nutella provides â€Å"The Ultimate Chocolate Experience† by offering a hazelnut spread that can be eaten with a variety of foods and enjoyed any time of the day. The combination of roasted hazelnut, skim milk and cocoa create a creamy, chocolaty taste with a hint of that roasted nut flavor that will delight your taste buds as you enjoy each delicious mouthful. Nutella will use its company name Ferrero to launch our new product development plans for Original Nutella chocolate hazelnut Spread, Peanut butter-Nutella swirls, NutellaPeanut butter Swirls, and Nutella Bars. Nutella will capitalize on its company name to promote brand awareness. Original Nutella chocolate hazelnut is a delicious creamy chocolaty hazelnut spread that can be eaten with a variety of foods and enjoyed any time of the day. Peanut butter-Nutella swirls and Nutella-peanut butter swirls are delicious peanut butter spread with creamy Nutella swirls. Nutella Bars are delicious for an on-the-go meal or an easy after-school snack. Packaging Nutella 34 ? Sales Task: Our promotional trial pack will be shaped like a squirrel. The squirrel shaped design will attract consumer attention. The jar attracts children to purchase the product because of its unique characteristic. The dispensing method for this package is more convenient and cleaner than the traditional jar shape attracting more sales revenue. ? Competitive advantages: Our jar will be 5% larger than our competition spread jars that are traditionally 18ozs. The larger jar will give our company a competitive edge by attracting American consumers that believe that â€Å"bigger is better. (please note that this alternative will be looked into in the future; 3 year or more) ? Product safety: Our Company, like many others will support the benefits of our packaging to consumers directly and even initiate recycling programs to save the environment. Not only is this packaging more environmentally responsible, it also provides economic and distribution advantages. To this means we have been continually reworking our packaging for better corporate identity, providing a more attractive package, a very important ingredient in the food industry. 6. 2 Pricing Mix Pricing strategy for various products ? Nutella original chocolate hazelnut will set its prices so that it can achieve product quality leadership above its competitors. Price says a lot about our product. Their Nutella 35 higher prices will give the illusion that their product is worth more. We are not afraid of establishing premium pricing for a premium product. o Its price is on average $3. 99-$4. 29 ? Peanut butter-Nutella swirls and Nutella peanut butter swirls will be priced below the industry average for the spreads market. Although we will make money off the Nutella Swirls, we consider this a â€Å"Loss Leader† strategy. Whereby unique product taste and quality will make customer curious and attracted to our additional product lines. o These products will be price similar to Peanut butter prices: between $1. 99 and $2. 95 ? Nutella Bars will be priced competitively. Even though we are subject to some impulse buying, we can provide a product to be resold at a generous mark-up for our dealers, while still providing a satisfactory experience for the customer. o At a retail range of $2. 79 to $3. 05 per box of (6-8) Nutella Bars, we cover the mid-to-upper price range of the breakfast market, while roviding a 33% margin for the dealers. 6. 3 Promotion Mix Sales promotions and public relations Sales promotions and public relations strategies will work together to inform customers of new products, to encourage an image of community involvement, and to limit environmental impact. Nutella will spend close to half a million dollars to build brand awareness and a loyal customer base. Marketing efforts will be f ocused on the target market, and the campaign will Nutella 36 run the entirety of 2001-2003, increasing roughly 35 percent per year to match interested sales revenue. The marketing budget will consistently equal almost 35-45 percent of sales. Advertising We will differentiate Nutella from imitation brands through aggressive advertising and promotional campaigns that demonstrate our unique quality taste, ingredients, as well as convenience, versatility and commitment. The advertising strategy Nutella will consist of advertising in the following media: ? ? Radio: Our ads will be concentrated strongly on the city’s top radio station among our target market segments. We will run regular ads to create brand awareness. Television: Through commercial repetition, a teaser campaign, and the use of catchy phrases, we hope to obtain intellectual ownership of our target market segments: when they think of a delicious and nutritious breakfast food they’ll have to think of Nutella. ? ? ? Newspaper: Sunday News, Daily Times Magazines: Highlights, People, Times, and various cooking magazines. Direct Mail: Flyers sent to mailing list The initial media blitz will be allocated as 10% radio, 45% television, 25% newspaper, 15% magazines, and 5% direct mail. These expenders will be based n 35-45 percent of total sales for the first two years, and then reduced to 25-35 percent of total sales thereafter. Sales promotional advertising ? Samples: Nutella samples will be handed out in grocery stores to introduce new product line. The samples will be accompanied with a â€Å"bounce-back offer† using a buy one get one free offer that promotes the customer to make an after sample purchase. ? Coupons: Accordi ng to a survey published by Dartnell Corporation â€Å"customers clipped 4. 8 billion coupons last year with an average face value of 70 cents, for a total savings Nutella 37 of 3. 4 billion dollars. † Coupons will stimulate sales of Nutella and promote early trial of our new products. ? Point-of-Purchase (POP) promotion: Our Company will offer a five-foot high cardboard display of Nutella next to Nutella spreads. Our company will offer a variety of POP materials, tying them in with television and print messages, and offering to set them up. ? Allowance: Promotional money will be offered to persuade resellers to carry our brand, give it eye-catching shelf space, promote it in advertising, and push it to customers. Currently Nutella is placed on the very top shelves and not in the center shelves where is about eye-level. Public Relations ? Press relations or press agentry: we will spend some of our Television advertising budget to have Nutella and its products be marketed in the news media to attract Americans to trying Nutella and its extensions. ? Investor relations: we hope to maintain and gain relationships with shareholders and others in the financial community. In addition, we will look into offering stock to the U. S. arket exchange (currently Ferrero/Nutella only trades in the European market). ? In the future (5 years or more) we will consider building brand awareness through our Nutella Cafe, leading greater word of mouth marketing. Nutella Cafe will implement a pull strategy in order to build consumer awareness and demand. Nutella Cafe has budgeted $6,000 for promotional efforts that will include advertising with coupons in local publications to attract consumers to Cafe shops. Nutel la 38 6. 4 Place Mix Distribution Strategy for retailers Our Company will use intensive distribution. It is a very popular breakfast in European countries, such as Italy, France, and Germany. (1) Do you think you would try this product? (Yes or No) (1a) Why or Why not? Please specify: (2) What do you usually have for breakfast? a. Creal b. Peanut butter c. Cream cheese d. Other, Please specify: (3) How old are you? a. 18-28 b. 29-38 c. 39-49 d. 50 or older Nutella ? ? ? ? The survey was given at California State University, Northridge, and so it applies primarily to 18 to 28 year olds. 100 people were surveyed: 26 of which had heard of Nutella, and 74 whom had not heard of Nutella. There were two sets of surveys one for the people who have heard of Nutella and one for the people who have not heard of Nutella. These charts briefly summarize the results. People who knew what Nutella was: How old are you? 18-28 29-38 39-49 50 or older 100% 0% 0% 0% How often do you buy Nutella? Regularly Often Rarely 0% 4% 96% If you dont buy and eat Nutella Too expensive Dont like it Cant find it easily Not motivated on regular basis, why not? 33% 11% 11% 44% Can you find Nutella easily in supermarkets? Yes No 55% 45% What do you eat usually for breakfast? Cereal Peanut butter Cream cheese Other 44% 11% 11% 44%