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Douglas College *

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Marketing

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Jan 9, 2024

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Guilt-free chocolates: Have your chocolate and eat it, too! When you think of chocolates – you probably think of Hershey, Mars or Cadbury - but that may not be for long. Barry Callebaut, the world’s biggest chocolatier may begin to occupy some mind space in consumers’ heads very soon with the introduction of the first antioxidant, guilt-free candy which is actually good for you! Barry Callebaut has a lot of things going for it - as the only vertically integrated player in the $58 billion chocolate industry, it processes 15% of the globe’s entire cocoa production and also competes with the likes of Hershey and Mars in the business of making and selling the final product - chocolates . At Barry Callebaut’s chocolate factory in Belgium – the largest in the world - sophisticated machinery extracts kernels from the cocoa beans to produce cocoa liquor which, after it is refined, is separated into cocoa powder and cocoa butter. These ingredients then go through a complicated process to create chocolate products for food giants like Unilever, Kellogg and Nestle. Barry Callebaut has also moved into supplying retailers like Wal-Mart that want their own private label brand of chocolates. Chocolate making at this level shares a lot with the fashion, eyeglass and watchmaking industries. You need the volume and good marketing to be profitable. So Barry Callebaut has been trying to create a “super premium” brand to compete with the classy brands like Lindt Chocolates. Barry Callebaut also wants to be known as a well respected global brand, not just as a European brand. To achieve this, the company needs to boost its presence in Asia, as well as in the US – not an easy feat! Chocolate is considered an exotic Western foodstuff for most of Asia. The Chinese consume just 1.8 pounds of chocolate per capita annually while the Japanese consume just 4 pounds per capita. Compare this with 11.7 pounds in the U.S. and 22.7 pounds in most of Western Europe. To address the global challenge, Barry Callebaut has opened a large plant in Singapore, complete with a “chocolate academy” to teach aspiring Asian chocolatiers everything they need to know about fine chocolate. This strategy is working; Asia is now their fastest-growing market. In the U.S., Hershey Foods is America’s brand leader in the candy industry, with annual revenues of $ 4.4 billion. Hershey is far more profitable than Barry Callebaut. But Hershey has a major weakness; it is not vertically integrated like Barry Callebaut. To increase its presence in the U.S., Barry Callebaut is using its army of sales people to pitch supermarket chains on carrying high-quality private label brand chocolates and seasonal chocolates for Valentine’s Day, Easter and Halloween. The biggest advantage Barry Callebaut may come to have over its better known U.S. competitor is its newly developed “healthy” line of chocolates: boxed chocolates made with added fibre or with rice powder (for lactose/milk intolerant people) that are actually good for you – and this makes them “guilt-free”. They can also boast that they have invented the
world’s first sugar-free chocolate that actually tastes like the real thing. All these are, of course, patent protected. How have they done it? In the normal chocolate production process, the polyphenols are destroyed during the cocoa fermentation and heating stages. But Barry Callebaut has patented a production technique which extracts the polyphenols early on in cocoa processing and then restores them during the final stages of chocolate production. Cocoa is rich in polyphenols; antioxidants that provide beneficial effects on cholesterol, cancer, blood pressure and long-term memory. Until now, the down side of consuming too much chocolate was an increased risk of weight gain and diabetes. Thanks to Barry Callebaut’s developments, that is no longer the case. One major weakness Barry Callebaut has is a lack of brand awareness and poor branding strategy. At present their Sarotti brand’s logo is a gnome-like character in a turban with pointy shoes – suggesting that they need to learn the art of global brand building. They obviously need a lot of help in marketing their products, which is why they have come to you. On the following pages you will find five specific questions related to the marketing of this guilt-free chocolate. Answer 4 of the 5 questions in the space provided. Source: edited from http://www.forbes.com/forbes
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