Group Marketing Assignment

Nestle Violet Crumble and Crunchie

Environmental Analysis

Due to the nature of chocolate and confectionery products being considered an “affordable luxury” to many, there are multiple factors that affect the supply and demand in a macro environment sense. Political and legal influences regulate how chocolate must be handled, presented, packaged and advertised on a day-to-day basis with expensive costs to the producers if found to be doing the wrong thing, such as having the product pulled from sale, fines and loss of consumer confidence. Economic and socio-cultural trends heavily impact on the demand of chocolate due to the reliance on impulsive and emotional purchases of confectionery with research suggesting increases in disposable income increases the demand of chocolate which is contradicted by studies that suggest demand is not price sensitive (Langley, 2016). Technology has seemed to reduce the demand for confectionery which is fairly reasonable when considering the short length of time grocery shopping has been available online which would say that brands have not yet adapted to this way of retail (Geller & Thomasson, 2016). Violet Crumble was recently recalled due to a small number of its chocolate bars being marginally under-weight prompting an instance recall on all products in an attempt to adhere to Government legislation and consumer expectations (COLLIER, 2015).

PESTLE Analysis

POLITICAL

• Name and description of product must be disclosed

• Nutritional information display requirements

• Food safety health standards

ECONOMIC

• Households have been trending positively for disposable incomes in Australia (ABS, 2016)

• Lowering interest rates in past months has given households with more disposable income in general

• 5.7% Unemployment rate June 2016. (ABS, 2016)

SOCIO-CULTURAL

• 5.7% Unemployment rate June 2016.

• Chocolate consumption has increased from 2013 – 2015.

• Chocolates mainly bought from super markets and by females

TECHNOLOGICAL

• Increases in online shopping are reducing the impulsive purchases of confectionery for many people.

• People able to skip over confectionery sections

• Online channels however represent a great opportunity for the confectionery industry to include itself in.

LEGAL

• Name and description of product must be disclosed

• Nutritional information display requirements

• Food safety health standards

ENVIRONMENTAL

• 70% of Cocoa production is in West African Countries

• Areas are very politically unstable and production is often interrupted by fighting.

• Global production is expected to decrease for a third consecutive year.

Competitor Analysis

The honeycomb chocolate market has increasingly become competitive from new entrants into the market from new and existing chocolate producers such as Mars, Darrel Lea and even home brands such as Woolworths and Coles. Cadbury has had the Crunchie bar in the market for roughly twenty less years than the Violet Crumble but has seen an increase market share over the Violet Crumble bar in recent years due to better promotional strategies and reputation of the brand (Langley, 2016). While many of Violet Crumble’s competitors have a small and particular target market such as Darrel Lea and Menz focusing an older and higher income bands of consumers, and Mars and Cadbury targeting younger age groups, Violet Crumble has failed to deliver a clear direction on who their product is focused on. In past years, advertising for Violet Crumble was focused the middle to late aged workers, particularly business men and women who needed any energy boost throughout the day. Another issue for Nestle is the packaging for the Violet Crumble being the violet purple colour which is now Cadbury’s token brand colour which could cause confusion or legal ramifications (Lee, 2016). Price points for many of the chocolate bars are the same with only separations in price coming from the bigger share packs which is logical when considering the strategy of some of those brands that supply share packs of honeycomb chocolate.

Company Analysis

The SWOT analysis has revealed that Nestle’s Violet Crumble has many strengths and advantages over its possible competitors such as being a long time product of Australia and being one of the first confectionery bars to be produced and sold in Australia. There have been no major changes to the product over time other than the obvious technological adaptations in the production cycle leaving an opportunity for a strategy around the classical yet modern chocolate bar. On top of that, the product has been labelled by many reviewers has a successful, tasty and preferred product over its competitors but has seen the opposite in data which says Crunchie and other Cadbury and Lindt products completely dominate the chocolate market. Due to the increased competitiveness of the honeycomb chocolate market over the last few years which has seen new market entrants grow from strong marketing strategies, Violet Crumble has seemed to take a dive in product sales and even shelf space in retailers and super markets. The reduced exposure of the Violet Crumble range due to discontinued products on the underperforming product line has caused a snow ball effect on the remaining individual 50g chocolate bar. This bar has seen no cosmetic or slogan change in its time of production with Nestle deciding to stick with a violet purple wrapper and the slogan “It’s the way it shatters that matters” which has issues such as Cadbury using the same colour for its brand and a slogan which people aren’t able to connect with anymore due to the large amount of people who have not even tried the bar. The history of the Violet Crumble has seemed to be lost with consumers as time goes on and generations change and fall out of target audience ranges which gives an opportunity for Nestle to tap back into the historical features of the Violet Crumble and reclaim its position in the market as a dominant and successful chocolate bar within a new generation.

SWOT Analysis

STRENGTHS

• Invented in Melbourne, Australia over 103 years ago

• One of the first confectionery bars made in Australia

• Honeycomb is still used in a very similar way from the very beginning

• Many reviewers believe the Honeycomb in Violet Crumble is superior to its competitors in many ways

WEAKNESES

• The chocolate used in Violet Crumble has been reviewed as not up to its competitors, mainly Cadbury as they use their signature chocolate to coat the Crunchie

• The classic purple wrapper of the Violet Crumble has not changed over the many decades it has been in existence

• Violet Crumble has much less exposure since the discontinued production of its 400g Share Pack Bags where the consumer would get multiple small blocks of Violet Crumble rather than a whole 50g Bar

OPPORTUNITIES

• Violet Crumble has been relatively unchanged since its invention over a century ago leaving a lot of room to create a history or story for the product

• Violet Crumble was created 26 years before its direct competitor, Cadbury Crunchie was first made giving more experience and value to the Violet Crumble brand

• Nestle are able to make adaptations to its strategy by really focusing on the positive of the bar which is that full tastefulness and texture superiority of the honeycomb over its competitors to gain an edge

• Due to the limited range of Violet Crumble, there is possibilities to evolve and expand the range to different shapes and sizes to appeal to larger audience

THREATS

• Cadbury’s Crunchie has a huge amount of support and is direct competition to Violet Crumble

• The wrapper is purple which is the same colour as Cadbury’s main branding colour which may have legal implications as well as people unable to distinguish the which brand Violet Crumble is from

• The honeycomb chocolate market is becoming increasingly competitive by brands such as Darrel Lea, Menz and even home brand products from Coles and Woolworths getting into the action

• The decline in cocoa production effects all chocolate makers due to the increase costing of purchasing the product however, will not affect Violet Crumble as much due to the limited amount of chocolate (59%) used in the product

Objectives

The situational analysis has provided a broad scope of knowledge, feedback, opportunities and threats to which the Violet Crumble bar can be improved upon. Due to this, three objectives have been researched, designed and planned to help the currently struggling chocolate bar to become a successful and larger competitor in the confectionary market.

These objectives are as follows:

< >Increase overall customer awareness by 30% by the end of the financial year 2017. Increase sales from all current retail outlets stocking and selling the product by 40% by the end of the calendar year 2017. Increase customer feedback and communication by 15% throughout the first three months of running promotions.

Target Market The main target market of the Violet Crumble are white collar workers. Violet Crumble has targeted white collar workers since the product was first introduced. This was made clear through ad campaigns released in the 1980s that featured office workers (Nestle, 1986).

Segmentation Variables

TARGET MARKET

Target market for Violet Crumble is white collar workers between the ages of 25-35. They would live in the city or commute from the outer suburbs purchasing a Violet Crumble on the way to snack on during or after work. They would be hard working and only get a shirt break hence why the Violet Crumble is an easy and convenient snack for them.

GEOGRAPHIC PROFILE

Aged 25-35.

Not gender specific.

Tertiary education.

Professional job.

Lives in the city/commutes from outer suburbs.

BEHAVIOURAL PROFILE

Enjoys time off work/having time to themselves.

Works hard.

Eats snacks between or after working.

Loyal to one chocolate bar.

Justification of Potential Target Markets

From 2013 to 2015, Australian chocolate consumption has risen from 65% to 69% with chocolate bar consumption rising 4% (48% to 52%) (Roy Morgan Research, 2016). This shows that more than half of Australia’s population aged 14+ consumes chocolate in any given four weeks and 78% of Australians consume chocolate once a week or more (Quilligan, 2013). White collar workers commuting to work from outer suburbs have more opportunities to purchase a Violet Crumble at convenience stores and petrol stations. As these individuals earn a high income, this allows for a generous disposable income which could be spent on snacks. The psychological and behavioural profiles of white collar workers show that they are inclined to stay loyal to one brand or product (Della, 2013). By targeting these brand/product loyal individuals, Violet Crumble will have a constant stream of sales and a steady platform.

Positioning Strategy

Violet Crumble is strongly positioned in the market with price and quality. However, due to the competitiveness of other name brands consisting of Mars, Darrel Lea and Cadbury, Violet Crumble has required differentiating positioning strategies to ensure that their product maintains their market share (Langley, 2016). Violet Crumble recently withdrew their 50g bars voluntarily from the shelves due to consumer dis-satisfaction and have decided to create different sizes and products of violet crumble to keep up with being in a successful position in the market (Nestle, 2015). Making Violet Crumble cheaper will attract more customers to this already famous product.

Positioning Attributes

The two main areas for positing that will be focused on are the price of violet crumble and the quality. These sections are extremely important to Nestle as a company. Pricing will be lower as to attract more customers, particularly in the white collar areas of the world. Quality will remain the same as Violet Crumble have made limited changes to their product in over 50 years on the market keeping it in a retro product.

Marketing Strategies

The violet crumbles currently supply one size of the chocolate bar. The implementation of various sizes and flavours of chocolate will increase market share and overall awareness of this product. Through the implementation of small and king size bars, block chocolate, little cubes chocolate, twin packs and the new dark chocolate and white chocolate bars. This larger product range will widen the potential target market for the violet crumble.

Price

The violet crumble is currently matching it competitors pricing. Through the use of undercutting, Nestle could increase sales of the violet crumble. The law of demand States that “as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa” (Fontinelle, 2005). The theory behind the law of demand helps solidify the use of undercutting as a pricing technique. An increase in sales volume can increase total profitability. The decrease in price and increase in sales can also lead to the violet crumble gaining a significant portion of the market share within the confectionary industry. The graph below shows how the possible moving of price can affect demand.

The chart above illustrates the increase in demand by lowering the price from $ 2:20 to $2, this increase in demand can lead to growth in total profitability and the overall market share that the violet crumble has within the concretionary industry.

The demand for Violet crumble in the future

Promotion

Through the use of virtual advertising, we will utilise social media platforms such as Facebook, Twitter, and Instagram to increase consumer awareness of the violet crumble. Each platform will have a different competition; these competitions will be broken up into daily, weekly and monthly the prize will vary in size and quality respectfully. These contests will run from January 2017 through to January 2018. The purpose of the competition will be to increase awareness of the product and gain information about the consumers. The Instagram promotion will give customers a chance to enter the weekly and month prize by posting a picture of themselves consuming a violet crumble, with the hashtag #crumble; these competitions will give consumers the opportunity to win $1000 and $5000 respectfully.

The use of virtual advertising has cost benefits over other forms of advertising; this cost reduction will help total profitability. With technology trends increasing at an alarming rate the use of virtual advertising is an import component of the marketing mix to create awareness and to maintain competitiveness.

Along with the virtual advertising, the use of in-store discounts/giveaways will be used to increase market awareness. The in-store discounts/giveaways will increase the demand for violet crumbles, which will gain them increased consumer recognition. The reduced prices and the social media competitions will have a multiplying effective on the market share that violet crumble controls. Through the use of codes within the wrapping of the chocolate bars consumers will be able to enter the daily and weekly prize through Facebook, these consumers will have to enter their name, age and email to enter the weekly prize pool, and they will have a one in six chance to win a free bar. The use of these promotional strategies will gain extra information on the consumer market.

To increase brand awareness, we will set up small stalls in areas that are highly populated with the target market. This stalls will give away sample size violet crumbles in an attempt to put forward the new flavours and gain customer feedback through one to one contact with the consumer.

Place

The current distribution method maximises the potential accessibility of the product by consumers, by selling it to the most popular supermarkets and convenience stores. The increased awareness that these places of distribution give the violet crumble allows them to achieve an increase in profitability, awareness of the product and gain increased knowledge on what geographic areas best suit the sales of the product.

Evaluation and Control

The evaluation and control of the marketing plan and strategies is very important as it measures and reacts to the ongoing results of the marketing plan. It is important for Nestle to see the benefits of their strategies in real time and before the conclusion of their marketing plan which would be too late if their objectives have not been met. Through the use of sales data, online results, surveys and sign up rates, Nestle will be able to constantly analyse and evaluate their current results and compare them to the overall objectives to determine if a contingency plan is required to boost the results towards the goals set. These contingency plans could include using the new data supplied by the current results such as retail sales trends, online data collection and most importantly, customer feedback and communication. The objectives set for this marketing plan are to increase customer awareness, increase sales and to increase customer feedback and communication. These are all measured fairly similarly through the use of sales data, online data from results, surveys and feedback. The timing of these measurements varies depending on the strategy and the length of time that the reflecting marketing mix lasts for such as promotions.

EVALUATION OF MARKETING GOAL/OBJECTIVES

Marketing Metric

Method of Measure

Timing

Responsibility

Specifically state each of the marketing metrics that you are measuring

1. Customer Awareness +30%

2. Sales +40%

3. Customer Feedback & Communication +15%

Identify 2 – 3 specific methods of how you will measure your achievement of each objective. Bullet points are okay.

Online Results (Searches/Clicks)

Sales Data

Customer Surveys

Sales Data From Retailers

Sales Data From Suppliers

Customer Sign Up rates for promotions

Customer enquiries

Customer Survey Results

Specifically state when (and how often) you will implement the method of measure

On-Going -> Monthly reports from Retail Outlets and Online Team

On-Going -> Monthly Reports from Retailers and Distributors

Weekly Reports from Online Promotion and survey teams.

Specifically state who will be responsible for providing the data/implementing the measure:

Marketing Manage and Online Marketing Team

Implementation & Schedule

The implementation is an important part of the overall marketing strategy. Making sure the right changes happen to the right strategies plays a major role in the success and ability to achieve the set objectives. The main role within the first month of this marketing strategy is research into specific changes and how to best adapt to the current market. Researching the product and possible changes will take the first four weeks followed by the creation of the product and then distribution and sales of the new products with feedback and analysis coming in a month before the finish of the new products distribution. This will allow Nestle to understand whether customers were happy with the new products and if they would purchase them in the future which would determine if the products are to be discontinued and only be limited edition or to mass produce and implement them on a full time basis. Research has already been performed to suggest that the price reduction of the Violet Crumble could help to increase demand of the product and possibly the overall profitability and position of the chocolate bar. The analysis of results from this change in Price would be constantly reviewed in case there is in need of any change. Promotion plays a major role in the repositioning of the Violet Crumble as it reflects majorly on the objectives set by this marketing plan. Social Media and Virtual Advertising will run for the full 12 months with marketing stalls running for 6 months in the middle of the year around the time of large exhibitions and festivals. The analysis of these promotional strategies will be on going during the length of the marketing plan. The place of the Violet Crumble will be expanded to more major supermarkets in an effort to capture a larger target audience who often shop at other supermarkets outside Woolworths and Coles who already stock and sell the Violet Crumble. These results will be evaluated throughout to make sure that it is profitable to expand to these supermarkets.

Conclusions and Recommendations

The overall marketing plan has found the target market to be mainly of white collar workers who enjoy a quick and easy snack during the day while they work which is an acceptable assumption considering the role that a chocolate bar plays in most people’s day-to-day lives as being an affordable luxury. The Violet Crumble has a rich and deep background and history which is most unsuspecting due to the current marketing strategy of the product which has been targeted for a major overhaul within this new marketing plan. Through the use of social media, virtual advertising, surveys and quizzes, the goal is to have the customer base acknowledge the Violet Crumble for what it really is and the message is portrays which is of better quality than its competitor while still being affordable. In fact, the price of the Violet Crumble is a target of change with a price decrease to hopefully improve the demand of the bar of its competitors. All of these changes are in response to the three objectives which are to increase customer awareness of the product, improve sales of the product and to increase the customer feedback and communication so that future changes can be made when necessary and there is a feedback loop already setup for consumers to engage with.

Due to these changes, the recommendations for the future are to stay current and up-to-date with what customers want and are interested in. Whether that be different sizes, flavours, prices, promotions or purchase places, Nestle should have a better idea as the changes occur. With constant review of the changes that have already been made and the introduction of promotions which is something very new to the Violet Crumble, there is a sufficient platform to make the Violet Crumble not only competitive in the market, but a dominant chocolate bar over its competitors, especially the Cadbury Crunchie.

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