Scharffen Berger Chocolate - Marketing Essay

The premium chocolate industry is a large market in the United States and continues to grow around 10% annually. It is also populated with very strong

While Europe and the United States account for most chocolate consumption, the confection is growing in popularity in Asia and market forecasts are optimistic about the prospects in China and India (Nieburg, 2013, para 9). According to the CNN Freedom Project, the chocolate industry rakes in $83 billion a year, surpassing the Gross Domestic Product of over a hundred nations (“Who consumes the most chocolate,” 2012, para 3).

With the increasing trend in healthy diet preference, the underlying drivers of change of competition in premium chocolate industry at the strongest level are the buyers’ preferences for differentiated, refined products, instead of standardized ordinary products that are no longer demanded. In addition, baby boomers - generation with their disposable income are spending a lot on high quality premium chocolates.

Sharffen Berger’s competed in the 1.2 billion premium segment with other high-end European chocolate brands such as Godiva, Valrhona and Ghirardelli/Lindt. The higher competitors in the market, the higher the cost of production capacity reducing the consumer demand causing less profitability for the company and their shareholders.

The demand for Thorntons boxed chocolates follows a strongly seasonal pattern: 35 percent of sales are in the seven-week period before Christmas, a further 10 percent are for Easter, including three million Easter eggs. The combination of providing a fresh product together with the need to meet a seasonal pattern of demand places particular pressures upon the company’s manufacturing facilities. A proportion of the Christmas product is produced several months in advance, maintaining freshness through chilled storage. However, Thorntons chocolates are enrobed in chocolate, rather than moulded. Their hand-made appearance makes the process of packing boxed chocolates less open to automation than is the case for moulded chocolates (with their more uniform shape an size) produced by companies such as Cadburys. The seasonal demand for packing staff requires the increased use of casual workers, with consequent falls in efficiency. Seasonal demand also requires the use of temporary staff in the retail outlets to meet a sales pattern that can within a few days increase tenfold; typically the company sells £10m of chocolate in the last 72 hours of Christmas trading. At times the company has sold icecream (self-manufactured or bought in) as an attempt to offset the effect of low, off-season, chocolate sales.

Retailer’s played a vital role in taking off J.H.Whittaker Business over years in the chocolate world. Their family saying “Blood is thicker than water and chocolate is thicker than that.” The Company themselves controls its entire manufacturing process, calling itself a “Beam to Bar manufacturer, to ensure top – Quality products.

This sections discusses the operational failures that led to the sales decline of Whittaker’s chocolate. The failures are linked to product and service

The company has used several tactics to tackle such effects for example, it uses level capacity plan to deal with demand fluctuations by keeping some products in storage for seasonal demands. Shelf-life limits are very tall on Nestle because the company sticks to itscore principles and quality of products. Therefore, not all products can be produced in surplus and kept in storage for difficult demand situations. Hence, the company uses marketing tactics like promotions and discounts on products to help them sell during the lean demand periods. Most of the previous methods discussed are concerned with demand but we also have to consider capacity – resources, production process, labour force etc. In chocolate production, constraints are higher in terms of the capacity of the machinery/technology and processes. Packaging is not a hurdle for the company, as it can hire extra staff in peak times to help or switch work force. Thus production process are more affected due to technological constraints rather than packaging or downstream process. All these constraints make the chocolate production process a little slower especially in peak periods. The product itself is consumable and it cannot be made in advance and left in storage. Thus we can conclude that capacity management and planning during seasonal fluctuations is an important issue for Nestle. The company uses

The company gains profit tremendously by selling their products worldwide. Besides that, the company also sell their products online through their official website. This has made their financial status stable throughout the years. As a result, the company’s business grew successfully and was forced to open more branches. Thrus, more factories were opened to produce more quality Hershey’s products (Mattern J., 2015). Other than that, the company increased the price for the ingredients including cocoa products, dairy products, sugar and so on due to the currency exchange rates as it is increasing in an alarming rate. However, Hershey’s Company also encounter some effects that affect their financial status. The price for Hershey’s products may not be sufficient to maintain its profitability as the price of everything is increasing day by day. The company may decrease the product size and increase the price of the product. However, this may result in a decrease amount of sales volume. Furthermore, the increasing of competitors will result in decreasing profit in the industry. Some competitors have better marketing strategy and large firms. This has cause Hershey’s Company to produce more advertisements and promotions to attract new customers. Besides that, the company needs to produce new and innovative products that are able to keep existing customers attracted. As for technological status, Hershey’s Company are using high-tech machines to produce first class chocolates for their target

ChocoMint is a bar of chocolate under ChocoHeaven, which is a distributor of organic chocolate. In recent years, the business of ChocoMint bar encountered some problems. Since the ChocoMint bar is manufactured overseas, the supply chain could be unreliable. Besides, as ChocoMint is stored at special storage locations in the UK, the storage capacity for this kind of product in the UK is limited. Therefore, in order to prevent the storage from exceeding the company’s storage capacity limits, as well as reduce the risk from supply chain (relying less on the overseas supply chain), sales department of ChocoHeaven has been trying to

Askinosie Chocolate was established by Shawn Askinosie in 2005. Askinosie was then a practicing criminal defense lawyer for twenty years in Springfield, Missouri. He left his job and used his lawyer skills to learn all that he could about chocolate: where it originated in the botanical, historical, and cultural sense; how it’s made; and how to use all its properties to produce something that people would love. Askinosie visited many places in the different continents just so he can learn the proper techniques that would influence the flavor of his finished products (“An Ozark’s Sunrise”). Askinosie started small, building the company from scratch. Now, Askinosie Chocolate, with only seventeen employees, earns up to two million dollars in revenues and is named by Forbes as one of America’s 25 best small companies (“Small Giants: America’s Best Small Companies”).

The nation of Belgium is renowned for its chocolate and takes every chance to promote this asset. The nation has a lot to give to the cocoa chain across the world (Elshof, 2012). In addition, Belgians consume large quantities of chocolate. Yet this nation prides itself in the finest chocolate quality given the fact that it is the home to a large number of small chocolate firms, acknowledged across the globe. Most important is the fact that since the last twenty years, different chocolatiers initiated business to manufacture chocolates. A nation could not desire for a better input to its economy than an industry, which proudly employs the term Belgian on its wrappings and outlets for its major products (Elshof, 2012). However, it must be noted that Belgium is not just a marketing tool for packets of chocolates. Barry Callebaut, a Belgian

Competition in the chocolate industry is also increased due to the fact that product differentiation is low. The intrinsic quality and external value of a bar of chocolate is similar therefore competition for sales is increased. Switching costs in terms of price and availability for customers is low as many players have similar varieties of chocolate on offer. Customers may not

Is it correct to say that a chocolate melts the sorrows away? Well for many of us having chocolates do prove to reduce our sorrows, so it’s fairly common for us to indulge in chocolate stress treatment once in a while. Particularly in times of economic slowdown, it has been observed that the sale of chocolates has shown a significant growth (Chocolate Confectionery Industry Profile, n.d.). During the stress times, people like to drown their sorrows or probably suffocate their sorrows in chocolates and during the celebrations too chocolates ranks amongst the first preference for many people to raise a toast to their celebration (B&T Weekly, vol. 57, no. 2613, p. 7). But studying the case of chocolate manufacturer is also no less than an indulgent luxury as it does add many new perspectives to our mind, which probably we have never thought before. Haigh’s Chocolates are the pioneers into the business of making premium chocolates in Australia. The company was incorporated in 1915, and since then its has been growing and achieving a reputation of the finest handmade chocolate manufacturers in the Australian Markets (Appendix A)

As our proposed location for the set-up of the plant, we are purchasing a chocolate manufacturing unit on sale in the UK .It is a well- established business located in a rural area of Somerset with equipment and machineries included in the sale. The expansion possibility in this business is high and has a pool of loyal customers. The location is highly-suitable in terms of labour availability and market proximity thus reducing transportation costs. The business description is as follows:-