Marketing Communication - Report Example

Marketing Communication Table of Contents Table of Contents 2 Brief Overview- Divine Chocolate 3 Fair-trade Certification and Divine Chocolate 3 Positioning Map for Devine Chocolate 4 Marketing Communication in Devine Chocolate 6 Proposal for Marketing Communication of Devine Chocolate 12 Reference 21 Brief Overview- Divine Chocolate Divine Chocolate Limited is a renowned chocolate company which is based on United Kingdom. The fair-trade organization is headquartered at London, UK. The company is famous for selling fair-trade certified chocolate products to customers. The company was established with the help of partnership between Kuapa Kokoo and Twin Trading in the year 1998. Kuapa Kokoo farmers cooperative owns 45% stake of the company (Divine Chocolate, 2011). Currently the company is offering its product portfolio to customers of UK and USA. Mission Statement of Divine Chocolate Divine chocolate was established with the help of joint cooperation between cocoa growers, farmers and other small stakeholders. Hence the company has established a vision statement moulded concept of fair trade, fair economies and interest of small stakeholders. According to CEO of the company, mission of Divine Chocolate Limited is to improve the standard of living of smallholders such as farmers, cocoa growers in West Africa by introducing their interest, quality of work, brand proposition to chocolate market of UK. Smallholders are positioned in the top most ladder of value chain of Divine Chocolate Limited (Divine Chocolate, 2007). Fair-trade Certification and Divine Chocolate Devine Chocolate is one of those companies who righteously follow all the important principles in order to sell fair-trade certified products. Pertinent issues of fair-trading for Divine Chocolate can be explained in the following manner. 1. Mission, vision, commitment, targets are clearly specified in the annual report of Divine Chocolate, 2. There is no tax issue associated with the operation of the company, 3. Almost 1,599 tonnes or 99.99% of the cocoa supply chain is traceable for the company, 4. The company provides £388,760 or 3.3% of sales revenue for betterment of farmers and smallholders and the company premium + production support to cocoa growers of Ghana, 5. Divine Chocolate does not use any organic compound, palm oil, genetic material in order to manufacture chocolate products and 6. Using child labour in the value chain operation is strictly prohibited in Divine Chocolate. Positioning Map for Devine Chocolate The global chocolate market is hypercompetitive in nature due to presence of large players, who have almost similar resource capability and marketing expertise. Five companies contribute more than 50% of global chocolate market which is worth of £62bn while three brands contribute to more than 80% of e £4bn UK chocolate market. (Source: Trading Visions, 2011) Global positioning map for Devine Chocolate and its competitors can be depicted in the following manner. Kraft Food In 2010, the company acquired Cadbury in order to become largest chocolate brand in the world. Global turnover for the company is £32bn and profit margin is £2.7bn. Leading products for the brand are Cadbury Dairy Milk, Milka, and Toblerone. Ferrero The Italian chocolate giant has achieved turnover of more than £200m in UK, global turnover for the company is £5.7bn and leading products for the company are Ferrero Rocher, Kinder Surprise, and Kinder Bueno etc. Mars The USA bases company has achieved global turnover of £19.4bn in 2011, leading products for the company include Snickers, M&Ms etc. Nestle In 1988, Nestlé acquired British company Rowntree in order to enter global chocolate market. Global turnover for the company is £68bn; leading products are Kit Kat, Smarties, and After Eight etc. Hershey One of favourite chocolate brand in USA, global turnover for the company is £3.7bn; leading products are Reeses, and Hershey’s Kisses, Hersheys Milk Chocolate etc. Devine Chocolate A fair-trade farmer owned chocolate company, global turnover of the organization is £12m and the chocolate company has achieved profit margin of £130k in 2011. (Source: Trading Visions, 2011) It is evident from the competitor analysis that Divine Chocolate Limited is relatively small player in comparison to their competitors; due to lack of resource capabilities the company needs to focus on optimal utilization of their small resources in order to design the marketing communication strategy. Marketing Communication in Devine Chocolate Research scholars have given integrated marketing communication theory in order to define all the components of communication matrix. Advertising, Sales Promotions, Direct Response Marketing and Public Relation are four cornerstones of integrated marketing communication (Kitchen, 2004). Marketers use general advertising strategy in order to generate awareness among customers through TV commercials, print advertisement, road shows etc. Direct marketing is used in order to generate awareness among customers with the help of delivering information regarding the product & services to customers. Sales promotion is used in order to generate awareness among customers regarding the products with the help of in store displays, point of sales electronic displays, providing free gifts to customers, free sample distribution etc. Companies use public relationship activities such as organizing public events, trade shows, news paper editorial etc in order to generate awareness among customers. Divine Chocolate focuses on using most of the components of integrated marketing mix in order to generate awareness among customers. The company has channelized the sales promotional activities through retail stores like Somerfield, Co-op, Sainsbury’s, Morrison’s, Comic Relief and Asda (Food Forum, 2002). These retail outlets use in-store sales promotions in order to attract customers to buy Devine Chocolate products. Problems with the Brand Awareness Generally, products having fair-trade certificates are priced higher in comparison to other products. Expensiveness of these products has reduced the size of its target market; fair-trade certified products are targeted to customers are ready to pay extra bucks for environment friendliness and ethical issues associated to these products. Unfortunately, such assumptions hold very little water for Divine chocolate because the company cannot afford to restrict itself to small target market while their competitors targeting to achieve penetration in mass market. This is why the company has created series of promotional campaigns such as television commercial endorsed by Ben Elton, public awareness programs etc. Present Communication Strategy The company has implemented a customer interactive program where customers recommend managers of retail stores to put Devine chocolate in merchandising list, such customer empowerment strategy has not only increased penetration of distribution channel of the company but also decreased promotional cost for Devine chocolate. The chocolate company moulds all the information regarding fair-trade certification logo, ingredient information, Christian Aid logos etc in the packaging of the chocolate bar. Marketing communication Devine chocolate is largely dependent of out-door activities and promotional tours. For example, The Company organized promotional tour covering places like Oxo Tower in London, Newcastle, Edinburgh, Swansea and Stamford for celebrating anniversary of Fair-trade certification. Devine chocolate invites farmers who harvest cocoa for the company to speak about their view point on benefits of fair-trade certification to customers. The company has already introduced public shows such as BBC good food show and Spirit of Christmas in order to generate brand awareness among young generation. Picture of one of such shows can be depicted in the following manner. (Source: Divine chocolate, 2009) The company has established partnership with Trading Vision in order to generate awareness for the benefits of fair-trade with the help of online resources; the strategic partnership gave birth to Pa Pa Paa Live website which works on increasing communication between students of UK and students of Ghana. Devine chocolate’s investment on digital marketing activities has been increased by more than 57% in last two years. The company uses social media sites such as Facebook, Twitter, and Linkedin etc in order to increase online presence of the brand. For example, the company launched “Egg a Politician” contest, which was broadcasted through social media sites during G20 summit. Distribution of e-cards and e-newsletter about benefits of Fair-trade certified products among online users is another example for digital communication strategy of the company (Divine chocolate, 2009). Products of Devine Chocolate Brand equity of the company has increased with the help of line extensions such as introducing new chocolate flavours, price line for new categories. A detailed description of brand extension can be summarized in the following manner. Typical products of Devine chocolate include chocolate ester egg, Honeycomb bees, dark chocolates, fruit basket, family chocolate box, box of milk chocolate and many others. Price of the products ranges in between £3.00 to £55.00. Divine chocolate offers various flavours such as raspberry, Ginger & Orange, Hazelnut, coffee, mint, milk, Fruit and Nut, Strawberries, Apricots, Mangos, Brazil Nuts and many others. Product portfolio of the company includes 100gm pack, 260gm Easter egg box, 55gm chocolate egg box, 170gm chocolate mini eggs, chocolate box containing seven chocolate bars etc. Flossy and dark papers are used for primary packaging of product, aluminium foils are used for secondary packaging but sometimes papers are used for secondary packaging also. Packaging of the divine chocolate products can be understood from the following picture. (Source: Divine chocolate, 2011) Wide distribution channel of the company is complemented with large retailers such as ASDA, Sainsbury’s, Target etc and small local stores. Customers have the option to use online retail channel in order to order products. Brand Equity of Devine Chocolate According to English dictionary, “Divine” means supremely good or beautiful, hence by giving such name to the brand, the companies tries to show the supreme quality of the product. The brand communicates about the quality of the product, benefits of fair traded products, social equalization concepts, all total it’s not just about a mere chocolate company but something more. Hence it can be said that, social and ethical message of the brand justifies its name of “Divine”. According to Sophi Tranchell (Managing Director of Divine Chocolate Limited), brand equity of the company was fostered with the growth fair-trade market. Although market competitors such as Mars, Nestle have understood the importance of ethical trading certificate and increased penetration in fair-trade market with the help of series of acquisitions but Devine Chocolate will always has the fast movers advantage. Devine chocolate is undoubtedly one of the most famous fair-traded brand in UK supermarket. According to Fill (2002), companies can use three types of communication strategy such as pull, push and profile. At present Divine chocolate focuses on communicating the product benefits to customers in order attract them to purchase divine chocolate from retailers, which is basically a pull strategy. The London based chocolate company has successfully distributed their products to all the listed super market of UK. Sophi Tranchell has stated that, the company has decreased the price of the products which are value chained through small suppliers in order to attract price sensitive customers (Cooper, 2009). The company has always tried to focus on mainstream market in order to generate higher revenue by selling chocolate products to larger set of customers. According to the managing director of the company, consumers can readily relate will the originality and genuineness in term of no usage of palm oil, genetic material or chemical agents of the chocolate products of the Divine Chocolate. Research scholars such as Meyer et al. (1993), Oliver (1999) and Zeithaml (1988) have stated that equity or image of a brand depends on various issues like product quality, personal belief of customers, socio-ethical bonding etc. The same concept can be applied in order to understand the brand of equity of Devine chocolate products. Fair-trade certification has improved the ethical image of the company among customers; customers believe that they are not just buying a premium chocolate product contributing something more to society and environment while buying the Divine chocolate products. Means end chain analysis of the brand equity of Devine chocolate can be depicted in the following manner. Consumer Perception Map Fair-trade Certification 100% Cocoa source Traceability 0% organic, chemical or genetic material usage (Health Benefits) Integrated marketing communication Attribute Competitive pricing and ethical assurance for smallholders and shareholders. Transparency of the supply chain. Increase in safety index for the chocolate bar. Increase in retail store visibility. Functional Level (Benefits) Gives assurance to customers who are concerned with interest of farmers and small holders in the value chain of Devine chocolate. Gives assurance to customers who are concerned with the genuineness of the ingredient of Devine chocolate products. Gives assurance to customers who are concerned with safety of Devine chocolate products. Generates awareness among customers to purchase Devine chocolate products. Psychological Level (Values & Believes) Customers feel happy that farmer’s interest is not getting overlooked while they are consuming the chocolate. Customers feel delighted that they are consuming chocolates which are made of 100% pure Ghanaian cocoa. Customers feel happy that they are buying or consuming a medically safe product. A drive for consuming the product is generated. Proposal for Marketing Communication of Devine Chocolate First of all, we are just reposing the brand image of Divine Chocolate rather changing the product. An integrated marketing communication will be needed in order to reposition the product. It is evident from the value proposition map that, consumers believe that chocolates with more fruit contents and less calories are healthy to eat. Hence the integrated marketing communication plan will certainly focus on promoting health benefits of divine chocolate to customers. The communication plan will suggest a road map to Divine chocolate on how they can avoid problems regarding constrained brand awareness and low penetration distribution channel. Strategic Communication Devine chocolate needs to identify its target market prior formulating any marketing communication plan otherwise the company will waste resources on tapping non potential customers. According to Berkowitz (2011), marketers need to segregate market on the basis of demographics, income level, educational level etc in order to increase effectiveness of the communication plan. Strategically the company needs to create customer profile for fair-trade certified chocolate products. Customer profiling for Devine chocolate can be done in the4 following manner. Segment Age Group Annual Income Level Psychology Education 1 18-25 > $35,000 They are driven by social cues and do not understand the meaning of ethical trading. High school and college level education 2 26-40 $35,000-$70,000 They understand the benefit of fair-trade certified products and ready to extra money for these products. College level and masters level education 35-65 >$70,000 They purchase product in order to enhance self image among peer groups. Education level doesn’t direct their purchasing behavior. (Source: Mintel, 2012) It is evident from the above analysis of UK customers that segment 1 and segment 2 will be the target market for Devine chocolate; hence the company should create marketing communication strategy on the basis of need of customers belongs to these segments. Education plays vital role for customers while they are buying a fair-trade certified product because certain educational level in order to understand the benefits of eco-friendly products. For example, partnership with Trading Vision is showing that Devine chocolate has also understood the importance of educating customers about benefits of fair-traded products. Company need to focus on creating a unique message for all the customers while deciding marketing communication strategy in order to avoid problems like message clattering. Tactical Communication Integrated marketing communication plan of Devine Chocolate should be based on four communication channels such as advertising, public relationship activities, digital marketing and retail store sales promotions. These programs can be briefly demonstrated in the following manner. Divine chocolate should follow “Profile Strategy”, which means communication strategy of the company should focus on satisfying needs of all the stakeholders instead of following bluntly push or pull strategy. Advertising The company should allocate sufficient amount of advertising budget for creating both below the line and above the line promotional activities. Direct to consumer advertising strategy of the company should be backed by television commercials, print advertisements, road shows, radio jingles. Key objective of advertising strategy should focus on delivering message regarding benefits of fair-trade certified Devine chocolate products to target customers. Local celebrities should be hired by Devine chocolate as brand ambassador for promoting the benefits of fair trade certifications to customers. The company should organize promotional tours across the UK covering all the major cities of UK in order to generate mass awareness about fair trade certified Devine chocolate products. Tailor made promotional events should be created in lieu with seasonal occasions such as Christmas, Halloween, spring fest etc of UK. Frequency of the advertisements is shown in the media calendar. Public Relation Activities The company should more focus on public relationship activities in order to trigger the marketing communication message to right customers. The company should establish tie-ups with major print Medias of the country in order to increase the brand visibility. Tie ups with news paper will help the company to publish editorials in the news paper regarding benefits of fair trade to customers. Press release regarding major events will help Devine chocolate to generate mass awareness regarding the benefits of fair-trade certified products. Sales Promotion Sales executives of the company should visit weekly basis to small and medium size outlets of UK in order increase stock replenishment rate while monthly visit of sales executives is needed for stock replenishment in big retail stores such as ASDA, Sainsbury’s, Target etc. Company should increase the primary sales margin for their channel partners in order to encourage them to push Devine chocolate products. Increased margin for retailers will motivate them to conduct in-store promotional activities such as discounting, setting electronic displays around point of sales (POS) etc in order to attract customers to purchase Devine chocolate products. Digital Marketing The company should create a customized digital marketing strategy, which should be comprised of e-mail marketing, social media marketing, search engine optimization etc. Face book and Twitter can be used in order to organize online events in order to communicate the benefits of fair-trade certified Devine chocolate products. Online blogging forum should be created in order to give customers the opportunity to discuss about their likings and disliking regarding Devine chocolate products. Media calendar for frequency of marketing communication events can be shown in the following manner. Media Calendar-2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Advertising News Paper 3 2 2 1 1 3 3 4 5 5 6 6 Magazine 2 1 1 1 1 2 2 2 2 3 Television 1 1 1 Radio 10 20 20 25 25 30 40 Sales Promotion 1 1 1 1 Digital Marketing 1 1 2 2 1 2 3 Hypothetical marketing communication budget is given in the following table in order to show in detailed manner that how the budget amount will be spent on different marketing communication activities. Marketing Communication Budget - 2013 Maximum Budget £13,000,000 Total Advertisement Cost £10,400,000 Variable Cost £2,600,000 By Objective Increase Sales £4,290,000 Brand Awareness Generation £5,777,777 New Product Launch £1,444,444 Increase Market Penetration £1,487,779 Print Advertisement Cost per Placement £2000 No. of Placement 100 Placement Cost £2,000,00 Initial Cost £2,000,00 Total £4,000,00 TV Advertisement Cost per Placement £1,000,000 No. of Placement 5 Total Cost £5,000,000 Sales Promotion £2,000,000 Digital Marketing £1,000,000 Public Relation Activities £2,000,000 A hypothetical advertising to sales ratio (A/S) can be given in the following manner. Suppose current revenue of the company is £12m and the company has decided to invest 8% of its revenue in developing marketing communication activities. Year Expected Sales Revenue Advertisement Expenditure A/S Ratio 2013 £13,000,000 £10,400,00 8% 2014 £14,000,000 £11,500,00 8.21% 2015 £15,000,000 £13,000,00 8.66% Such communication plan will reposition the Devine chocolate brand among customers. Repositioning of Devine Chocolate According to Fill (2002), DAGMAR is a hierarchical model of communication process, which is comprised of awareness about the product, comprehension about the benefits of the product, conviction in the benefits of the product and action regarding purchasing the product. A modified DAGMAR model can be used in order to understand the repositioning of Devine chocolate among customers after execution of communication plan. 1º Perception Strategic placement of retail store electronic display will engage convenience shoppers. Word of mouth about the benefits of fair-trade certified products will generate not only awareness among customers but also engage them to promote the benefits Devine chocolate in self driven manner. 2º Learning TV Commercials will generate awareness about the health benefits of Devine chocolate to customers and simple communication message from the mouth of popular TV celebrities will help individuals with average intelligence level to understand the benefits fair-trade certified products. 3º Persuasion Logical message will help Devine chocolate to infuse persuasion among people with high educational background and intelligence level to purchase Devine chocolate. Reference Berkowitz, E. N., 2011. Essentials of health care marketing. 3rd ed. Burlington, Massachusetts: Jones & Bartlett Learning. Cooper, B., 2009. The just-food interview – Sophi Tranchell, Divine Chocolate. [Online] Available at: [Accessed 15 February 2013]. Divine Chocolate., 2007. Annual Report 2006/7. [pdf] Available at: [Accessed 15 February 2013]. Divine Chocolate., 2009. Annual Report 2008/09. [pdf] Available at: [Accessed 15 February 2013]. Divine Chocolate., 2011. About Devine. [Online] Available at: [Accessed 15 February 2013]. Divine Chocolate., 2011. All Products. [Online] Available at: [Accessed 6 March 2013]. Fill, C., 2002. Marketing communications: Contexts, strategies and applications. London: Financial Times Prentice Hall. Food Forum., 2002. Divine Chocolate. [Online] Available at: [Accessed 15 February 2013]. Kitchen, P., 2004. Integrated Marketing Communication: A Primer. London: Routledge. Meyer, J., Allen, N. and Smith, C., 1993. Commitment to organizations and occupations: Extension and test of a three-component conceptualization. Journal of Applied Psychology, 78, pp. 538-51. Mintel., 2012. Chocolate Confectionery - UK - April 2012. [Online] Available at: [Accessed 15 February 2013]. Oliver, R. L. 1999. Whence customer loyalty. Journal of Marketing, 63(4), pp. 33-44. Trading Visions., 2011. The Chocolate Scorecard. [pdf] Available at: [Accessed 15 February 2013]. Zeithaml, V. A., 1988. Consumer perceptions of price, quality and value: A means-end model and synthesis of evidence. [pdf] Available at: [Accessed 14 February 2013]. Read More