Marketing Plan: Thorntons Plc - Essay Example

? Marketing Plan: Thorntons Plc Inserts His/Her Inserts Grade Inserts (07, August, Executive Summary Thorntons is a well known company all over the country but currently it is going through some tough times. The marketing campaign suggested below will help the company realize three specific objectives. It will allow the company to increase its sales by 25 percent during October to December in Hull City. The second objective is to increase brand recognition and awareness among the public by 40 percent during the season. The third objective is to increase customer loyalty significantly and turn at least 30 percent of its customers into repeat customer during the season. The company will use television advertisements, bill boards, and social media to market its brand to its main target market which is the young population of Hull City. The strategy of market penetration will be adopted by the company to increase its market share. The company will also use the occasion of Christmas and the tradition of gift giving in its marketing messages to the young population of Hull City. Table of Contents Table of Contents 3 Introduction 4 SWOT Analysis 4 Marketing Objectives 5 Target Markets 6 Product Offering 7 Brand Positioning 8 Marketing Strategies 9 Consumer Behavior 9 Marketing Mix for the Marketing Strategy 10 Implementation and Control 13 Budget 14 Appendix 16 Figure 2: Balance Scorecard of Chocolate Industry UK 17 Source: Trading Vision 17 Introduction The Christmas season is good for the retail industry as it is a season where people exchange gifts. The season offer immense opportunities for businesses all over United Kingdom. Chocolate industry like other similar industries also experience significant increase in sales in the Christmas season (Holmes, 2009). Thorntons is a famous chocolate company of United Kingdom having presence all over the country (Thorntons, 2012). It is therefore vital for Thorntons to capitalize on this opportunity and build a strategy that can target customers effectively. In this paper, a detailed marketing plan will be presented. It will include a SWOT analysis, marketing objectives, target groups, product offering, brand positioning, marketing strategies, and marketing mix. A detailed budget will also be presented in the marketing plan. In the marketing plan specific steps will be discussed that the company can use to increase its sales in the Hull City. The marketing plan will aim at increasing the sales of the company in the Christmas season. SWOT Analysis s Strengths Weaknesses Established Brand Name (See figure 2 in Appendix) Rich History Established Infrastructure in Markets Good Public Image Reduced Sales Confused Pricing Strategy Consistent Profitability issues Issues in Distribution Opportunities Threats Growing Chocolate Industry Young population of Hull City Seasons like Christmas and Easter Governmental regulation regarding food marketing and chocolate sizes Increasing competition in the industry Ethical issues reading Cocoa farmers Marketing Objectives The main marketing objective of Thorntons is to increase its sales in the Christmas season in the Hull City. As discussed above the sales of chocolate increase significantly in the Christmas season (Sweet Retailing, 2011) and therefore the company has a vast market in front of it. Thorntons should follow the strategy of market penetration in order to increase its sales in the Christmas season. Market penetration strategy helps the company increase its market share (Proctor, 2000). The strategy of market penetration is very appropriate for the company at this particular point because its overall sales are reducing and this strategy will help the company remedy this weakness. The company also has a rich history and well established brand name in the market and it can use it to attract more sales. The company should have three specific marketing objectives. The first objective should be to increase its sales by at least 25 percent from October to December. This is not very audacious given the fact that Christmas season is generally good for the retail industry and companies experience growth in their sales during the season. The chocolate industry is itself set to grow in future in UK (Euro monitor, 2011; See figure 1 in appendix) which is why such audacious targets are justified. The second marketing objective for the company should be to increase its brand recognition and awareness by at least 40 percent in three months (October to December). Thorntons can use metrics like website views and social media activity to measure the increase in its brand recognition and awareness. This marketing objective will complement the main strength of the company, which is its established brand name, as increase in brand recognition and awareness will help the company make use of its brand name to increase its sales. The third marketing objective should be to increase customer loyalty, especially in the young segment of the society. This will be done by increase the number of returning customers. The company will have to communicate effectively at all customer touch points to ensure customer feel compelled to return to the company in future. Loyalty of young population can be measured through social media which includes Facebook, Twitter, and YouTube. Returning customers should constitute at least 30 percent of the company’s overall customers from October to December. Target Markets The target market of Thorntons should mainly be the young people. This is the market that consumes most of the chocolate. The population of Hull City also consists of a significant number of young people. Around 26 percent of the population of the city is between 20 to 34 years of age (Hull City Council, 2011). This clearly suggests that young people should be the center of attention of Thorntons communication strategy. Young generation also exchange more gifts that any other age group because they are more generally more social. This is why the main target market for the company should be young population of Hull City. Chocolate industry thrives on young people as they are the main consumers of chocolate. Young people in UK also buy chocolate on impulse (Mintel, 2000). This is why it is important for the company to target young people in the Christmas season to increase its sales. Young people consume chocolates without thinking too much and this is the market which the company can target easily. Another major reason of selecting this particular target market is there affinity towards technology. The company has an online store and therefore has infrastructure to attract youth. Young people are more interested in buying online and online store will help the company increase its sales. This is another reason why choosing young people as target market is justified. Product Offering Chocolates are really famous among residents of United Kingdom and the industry is set to grow at a great pace in future in the country (Divine Chocolate, 2011). This is why there is no doubt that Thorntons has a wonderful opportunity to increase its sales. Also the gift giving tradition on Christmas will help the company a lot in increasing its sales. Currently the company is offering chocolates in many flavors and SKUs. It is important to do in order to cater to the demand of a wide range of clientele. Chocolates are different from other products and company can therefore afford to have a variety of flavors and SKUs. Thorntons is currently selling both individually wrapped chocolates and chocolates with gift boxes (Thorntons, 2012). This approach needs not be changed significantly as it is important to have a wide range of products. The company is also offering customized chocolates on its online store which is good. All these things will help the company increase its sales in the Christmas season. Brand Positioning One of the main problems because of which the sales of the company are reducing is its confused positioning in the chocolate industry. The company does not know where to position itself in the industry as it keeps on oscillating between luxury and ordinary chocolate market (Richardson, 2011). This is a major problem that is behind the reducing sales of the company. The company is not clearly positioned in the chocolate market. It is important to understand that this has nothing to do with offering products at lower or higher price. Positioning is all about creating and shaping public perception. The public in general should know whether Thorntons is a luxury chocolate seller or a low priced regular chocolate company. This has everything to do with public perception and therefore it is important for the company to use marketing to shape public perception and position itself in the right manner. It is vital that the company should spend more time in making it clear for the people regarding its position in the market. For this purpose the company should make use of all available mediums. It should come out with a tag line that tells people clearly about its positioning in the chocolate industry. All advertisements should also be designed to make it clear about the main target of the company whether it is luxury market or regular chocolate market. The company should also focus on the reasons why people consumer chocolates and design its marketing strategy accordingly. It should also reposition its brand in a way that is most profitable for the company. Unfortunately brand repositioning is not something that can be achieved in the short run and Thorntons will need more time to carry out its repositioning. What the company can do in the short run is to inform people about its main target market through advertisement and taglines. The positioning should also be done keeping in mind the reasons why people buy chocolates in Christmas season. Gift giving is one of the major reasons why people consume chocolates in the season and therefore this should be incorporated in the marketing messages of the company. Marketing Strategies Consumer Behavior The main consumers of chocolates are the younger generation and they buy chocolates for personal consumption and gift giving. This is why all the marketing strategies should aim at targeting this particular market. Marketing can play a major role in the chocolate business because buying chocolates is not a very high involvement decision. We have discussed earlier that chocolate buying is an impulse decision for people of United Kingdom and therefore it is vital to have advertise to this target market as they are the ones that can be influenced easily through marketing. The season of Christmas is also cold in Hull City and the average temperature ranges from 8 to 14 degree Celsius (World Guides Website, 2012). It is also known that chocolate consumption is highest in the winter season (The World Atlas of Chocolate, 2012). This means that consumers consume more chocolate in the winter season. This shows that the strategy of market penetration advocated above is appropriate for the company. Marketing strategies should be designed keeping in mind all elements of consumer behavior. Marketing Mix for the Marketing Strategy The tagline suggested for this particular campaign is “The best gift you can give to your loved ones, Thorntons”. This tagline takes into account all elements of consumer behavior and also incorporates the gift giving tradition of the Christmas season (Rohrer, 2009). The marketing mix for the company should be developed keeping in mind this tag line and the consumer behavior of the population of the Hull City. The season of Christmas is the main` highlight of the season and therefore it is vital to develop a marketing mix based on this season. The pictures and videos can be used to attract customer of the Hull City. Pictures of friends enjoying chocolates together and giving gifts to everyone can be used in the campaign. The aim should be to market Thorntons as the ‘best gift’ in the Christmas season. All this can help in improving the sales of the company during the season in the Hull City among the target market of the company. Product All the products will be marketed in this campaign but focus should be on gift boxes. The aim of the company is to market itself as the best gift anyone can give and therefore gift boxes should constitute a major part of the campaign. Individual chocolates can also be marketed as they can also attract customers. The packaging of the products will be done in Christmas special wrappers. This will tell the consumers that the company is offering specialized Christmas gifts that are appropriate for the season. Designs like that of Santa Clause and other Christmas related themes. This will also help in attracting clientele. Place The company is currently using independent retailers alongside with its own chain of stores and an online store to sell its products. Thorntons however has increased its reliance on supermarkets and franchises (BBC, 2011). In order to increase sales in the Christmas season in Hull City the company will have to target young people on social media and advertise its online store to great ends. This will allow the company to attract more sales since the target market of the company is technology friendly. Through online store, the company can also reduce its operating costs greatly and therefore online store should be the focus of attention of the company for this campaign. The nature of products being offered is also such that people will go online and buy it. Usually gifts are bought on internet as it takes care of shipping too. This is why online store should be the focus of company’s attention. Price Pricing is related to the overall positioning of the company. Currently the company is confused as where to position itself. We have mentioned earlier that positioning problems cannot be solved in the short run and therefore at present nothing can be done about it. The company therefore has to price its products in the medium range. Pricing gift boxes is not difficult as large gift boxes can be sold for higher prices and small gift boxes can be sold for lower prices. Also the main target market of the company is the younger generation and it should be kept in mind that they cannot spend too much money on chocolates. This is another reason why prices should be kept in medium range. Promotion The company will have to offer special promotions in the Christmas season. It is a norm in the retailing industry to offer discounts in the season and therefore the company should also do the same. Sales promotions are also economically desirable for retail companies (Stones, 2011). Every gift box should be accompanied by a small chocolate. This will allow the individual who is buying the gift to also enjoy the product. Such promotions are an integral part of the Christmas season. Television marketing is essential in order to attract customers. Television ads should be made and aired between popular programs so that people are able to identify the brand. Television advertisement is essential for increasing brand awareness. Billboards are also important for advertisements and they also cater to a significant portion of the society. They will also be used in the campaigns. It is vital for the company to use social media advertisement in order to attract young customers. Young people regularly use social media (GMID, 2007) and therefore social media can play a major role in increasing sales of the company. Twitter and Facebook, if used effectively, can yield sales for the company. Social media advertisement is also not expensive as the company can increase activity on its own page. The company can also use YouTube to advertise its brand and promotions. Implementation and Control Brand Awareness Objective The first objective of the company should be to increase in brand awareness. This can be done by advertising on television, bill boards, and social media. The company can advertise on famous television channels like BBC 1, BBC 2, and Channel 4. The television advertisement will air in programs between 6and 12 pm because this is the time when most young people are at home watching television. The advertisement will air for 6 six times every day for about 3 months. Billboards will also be used for advertisement and around 5 fixes billboards will used to advertise for the campaign. The company should also make use of the new movable billboards and advertise on buses and trucks. On social media, the company can start quiz campaigns and can award gifts to people who answer questions correctly (see appendix 2). The company can also start different contests on Facebook and YouTube that can attract the attention of the youth. The aim is to generate conversation on social media and special posts should be used for to ignite conversation (See appendix 2). The success of advertisement on all these mediums will be measured through the increased participation on social media and number of viewers watching the advertisement. Sales Increase Objective The sales increase objective will be achieved through all the above mentioned methods. In order to achieve high number of sales the company will spend on advertisement. It is important however to spend on advertisement more than the benefit that the company gets through the advertisement. The increase in 25 percent of the sales will allow the company cove all its expenses on advertisements. Increased Customer Loyalty The company can measure the loyalty of customer by keeping records of all its sales. This can be easily done through its online stores. For physical stores, Thorntons can introduce promotions for returning customers and can offer them coupons. Every 10 coupons can give customers a gift of their choice. This will help the company track returning customers easily. Customer loyalty can also be measured through social media activity. Company can make a list of people who respond regularly to videos and other postings. Budget We will spend a total of half a million pounds for this campaign. This is amount is chosen careful keeping in mind the objectives. Thorntons should make a profit if more than 500,000 pound s from this campaign and only then we will deem this campaign as successful as a whole. This budget will be divided between television advertisements, bill board advertisements, social media activity, and staff expenditure. The main expenditure will be on designing television and bill board advertisement. This expenditure will constitute a big portion of the budget. Another big expense will be on buying slots for television advertisements. A detailed budget is given in appendix 3. It is also important to understand this campaign will also benefit the company outside the Hull City because other than bill board advertisements, all other mediums will cater to young people all over UK. Television advertisement will go on air for the whole country and social media will also reach to a country wide market. This is an important element to keep in mind when measuring the effectiveness of the campaign. Appendix Figure 1: UK Chocolate Industry Actual and Expected Growth: Figure 2: Balance Scorecard of Chocolate Industry UK Source: Trading Vision Appendix 2: Possible competitions for Social Media What is your favorite Thorntons product and why? Best answer will win a special gift hamper Other examples of Facebook posts are given below. How old is the brand of Thorntons? What can be done to improve our services? What is bad about us? The aim of this is to kindle conversation on the social media regarding the brand. Appendix 3: Budget for the campaign Details Total expense Staff expense (staff of 6 people with monthly salaries of 10,000 pounds per month) ?30,000 (for three months) Television Advertisements ?250,000 Billboard advertisements (a mix of both expensive and cheap bill boards) ?20,000 Advertisement designing costs ?195,000 Miscellaneous expense ?5,000 Source: ITV UK (2012); Myadbase.com (2012); Outdoor Advertising (2012); NGI Creative (2012) Bibliography BBC UK. (2011), Thorntons set to close up to 180 Shops, [online] Available at: < http://www.bbc.co.uk/news/business-13939089> [Accessed August 07, 2012] Divine Chocolate. (2011), Chocolate Facts, [online] Available: http://www.divinechocolate.com/about/resources/facts/chocolate_industry_today.aspx [Accessed August 07, 2012] Hull City Council a (2011), Age Structure, [online] Available: http://www.hullcc.gov.uk/portal/page?_pageid=221,680662&_dad=portal&_schema=PORTAL/ [Accessed August 07, 2012] Holmes, R. 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