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Ferrero goes abroad to introduce its products in America, Australia and Southeast Asia. Then, in the 90s, the group keeps its success in South America. In the French market, Marks Nutella, My Darling, Kinder, Ferrero Rocher and later, Tic Snap permitted Ferrero France to be on the first place of the confectionery of chocolate market since 2004. We have chosen the product Nutella for our case study.

French people consume about 800 grams per year. In fact, Nutella is a part of the Ferrero Corporation with 15% of its sales and is the fourth largest confectionary group all around the world. 1. The situation analysis 1. 1. The environment 1. 1. 1. What are the expectations of customers 1. 1. 2. What are the potential competitors 1. 2. The industry We are going to analyse the industry Ferrero with a complete survey of the company’s situation, thanks to the Porter’s five competitive forces model. 1. 2. 1. The rivalry among existing competitors 1. 2. 2.

Threat of new entrants 1. 2. 3. Threat of substitute products 1. 2. 4. Bargaining power of suppliers 1. 2. 5. Bargaining power of buyers Ferrero has got a very large variety of goods, but he although has got a lot of rivalry. We can for example speak of all the chocolate bars marks like Mars Incorporated. Globally, Ferrero is one of the market leaders in Europe for candies, but it doesn’t mean he can stop to innovate. In fact, because off all the other candy marks, like MARS or NESTLE, Ferrero is always about to find new possible products: for example “Kinder Schoko

Bons” which has come out a few years ago has been a real success. Ferrero is also trying the Nutella&Go in France, after trying it in United States, where it has been very popular. Other new products are also the “Kinder Bueno” or a new bar: “Kinder ChocoFresh”. The threat of new entrants is not very high, as the market is full. But because of the habits to have something to chew, the market in this area is very competitive, and every month new products enter the market. For example “Pom’Potes”, which became very popular, as it is between a beverage and a snack.

The threat of substitute product is very high. As said before, globally chocolate bars are competing with chocolate, candies, cereals bars and snacks. All of these products have their advantages and disadvantages. And so are competing one another. 1. 3. The firm 1. 3. 1. The company mission The main objective of Ferrero is to attract young people, especially child, by offering them a pleasant meal for their snack; today, the company also target grownups. Ferrero is well-known as a company which provide good quality : that is why it is one of the leader of the market. 1. 3. . The company objectives and goals The first goal of Ferrero is to insure its position as a market leader. The company is already omnipresent in the world, mainly in Europe with around 15 factories, nevertheless it keeps improving on its image. Ferrero wants to be seen as a defender of core values, such as amily, conviviality, health, enjoyment. A lot of famous products are produced by Ferrero, for example the Nutella and the Kinder Surprise. The objective is innovation for : flavours, shapes, product names… but always with good quality. 1. 3. 3. The business portfolio

Few companies sell just on product; some sell thousands. This is the case of Ferrero. To achieve its goals, all the products are referred to as the product portfolio, and an associated management. So, Ferrero is a product line: it contains a number of products (Kinder, Nutella, Ferrero Rocher, Raffaello…), which are more or less different. To analyse the management process following this fact, we have a lot of product portfolio analysis tools like the Boston Consulting Group matrix (BCG matrix), developed below. 1. 4. The marketing process for the “Nutella” 1. 4. 1. The marketplace The buyer decision process o Need / problem recognition The buyer decision process is not provoked by a need. The product is made to stimulate the desired state of the customer and make him buying the product on an impulsion. In fact, it is not a purchase which is considered and the buyer doesn’t really try to find alternatives or substitutes, but buy the product because he wants this one especially. The consumer behaviour is based on his desire of eating the product. The packaging is made so that the customer can see the Nutella and want to eat it. o Information search The information search involves identifying the various ways the need or problem can be satisfied. ” About Nutella, the information search is more about brand image, word of mouth and advertising. Everybody knows the brand Nutella for many years and the original information search was made thanks to medias. o Evaluation of alternatives “Evaluate the alternatives is to assess the different products of brands within the awareness set” About the alternatives, the consumer could think about a lower price or a less caloric product. For instance, in discount supermarkets, we can find “pates a tartiner” similar to Nutella.

Moreover, a woman who takes care with her body and her child bodies will pay attention to the calories and prefer buying another product. o Purchase decision “Purchase decision is when a consumer selects the preferred product or brand” o Post-purchase evaluation “The post-purchase evaluation determine whether the consumer will repurchase the product and how they will influence other people in terms of purchasing the product” – Factors influencing customers behavior A lot of factors could influence customers behavior and, for consequences, the purchase decision.

First, the culture is the main external factor. 1. 4. 2. The marketing strategy The marketing strategy is turned to the children who are the main consumer of the product. Indeed, the product is understandably attractive for children who like snacks. – Market segmentation criterions – Target market The target market is the set of buyers who share common needs or characteristics that the company decides to serve. For Nutella, is more a segment marketing because of the children target, but Ferrero tries to attract all kinds of buyers, like a mass marketing. . 4. 3. The marketing program – Product strategy The product is known by everybody, but customers don’t go in a supermarket in the aim to buy it. So, the place strategy consist in put the product in store on a space where it can be seen by the most people who will be tempted to buy it. The product is selling 3, 84 euros, and they could have higher price because of the fame of the brand. Even if another product is a little cheaper, people will still buy Nutella because of loyalty brand. – Place strategy – Promotion strategy ADVERTISING (budget)

Result of the campaigns: turnover, augmentation des ventes, des members – Pricing strategy 2. The SWOT Analysis ? Internal SWOT Analysis 2. 1. Strenghts First of all, Ferrero is presented as a company in good health. We are going in this part to present the points which help the company to keep this place of leader. • Nutella has gained control of the European market: Nutella is in Europe what peanut butter is in America. • Product is positioned as “the one” and of high quality in taste: that is why there is a strong demand. This is the original product. Broad appeal to many market segments: there is not a special target market. All the people are concerned and there are a lot of target opportunities. • Variety of consumption methods: we can consume Nutella with almost everything: bread, donuts, crackers, bagels… • High company awareness from other popular Ferrero products with notably an effective communication. 2. 2. Weaknesses • Caloric product • Higher price than peanut butter competitors • Not placed on shaped in eye-catching spot • Some people perceive Nutella as an unhealthy product ? External SWOT Analysis 2. 3. Opportunities People have less time to cook, especially in the morning, and want to make their breakfast quickly. Eating Nutella resolves this problem. • Notoriety of Nutella • The habits of consumption • A large target, whatever the age • Internet usage has increased and it is a good way to promote: solution is to increase advertising online. • People watch TV a lot during the week and see the ads: Nutella has to advertise on TV. • Snack consumption is rising: solution is to offer Nutella in a snack format. 2. 4. Threats • High competition with peanut butter brands (more in America) Substitutes: a threat of new product like Nutella (for instance less expensive than Nutella like imitations by Liddle). So, the solution is the market intelligence and legal protection from competitors. • An environnement more and more concentrates on healthy nutrition, without calories • The mistrust of mothers because of the risks of obesity • Bad economic cycles: in fact, in crisis, people prefer buying imitations or substitutes less expensive than Nutella because of the fall of the buying power. Solution is maybe to explain in ads why it is so important to buy Nutella. 3.

Evaluation of the company strategy and recommendations. 3. 2 Recommandations : – Keep on investments in communication in order to support the consumption of Nutella (keep the music « Glorious by Andreas Johnson » which refers to the product) – Keep on the strong visibility of the product in Supermarkets and other points of selling’s – Developing new shops in the same way as Nespresso ( where people could taste the product and also be member of a club) – Intensifying the fact that Nutella is not only a product for children but also for family and grow-up ( Nutella is more seen as a child brand) Developing new by -Product like « Nutella and Go » – Ferrero should export its goods in all over the world. Indeed Nutella is not famous in the U. S 3. 2 The marketing segmentation and target marketing: In order to estimate the marketing strategy of Ferrero, the best method is to analyze the marketing segmentation and also the target marketing. The marketing segmentation is “the process of dividing a total market into subgroups (segments) such that each segment consists of buyers and users that share similar characteristics but are different from those in other segments”.

The target marketing is “a group of buyers and consumers who share common needs/wants or characteristics, and whom the organization focuses on”. Concerning the geographic segmentation Nutella is principally present in Europe because of its past: The manufacture which created Nutella was in France. So the company exported its product in the neighbouring countries. About the demographic segmentation it is interesting to analyze this case. Nutella is seen as a child product. Kids are the main consumers so there is a real dependency towards children.

If they decide not to consume Nutella , Ferrero will be in troubles. The company is trying to attract new target like grow-up and hopes to sell it thanks to the fact that everybody knows Nutella. They could buy it because they remember buying it when they were kids (brand loyalty). 4. Sources Global websites: http://www. wikipedia. com Websites of the brand: http://www. nutella. fr http://www. ferrero. fr Economic websites: http://www. strategies. fr/actualites/marques/r44936W/television-nutella. html http://www. lineaires. fr http://www. lesechos. fr http://www. nutella. fr