Ferrero Takes a Bite of the Australian Market - Case Study Example

? Running head: Marketing Marketing Case Study of Ferrero Company Insert Insert Insert 18 July Introduction Ferrero is an Italian confectionary company founded by Pietro Ferrero in 1946. Pietro Ferrero incorporated 50% of hazelnut and 50% of cocoa confection as a means of beating the heavy taxes imposed on cacao beans (Australian Trade Commission, 2012). The company tremendously grew after modifying the original recipe of Nutella and introducing it in the Italian market and it has expanded into most parts of the world successfully (Kotler & Keller, 2012). Nowadays the company sells a significant proportion of the world’s consumed chocolate and continues to expand rapidly through in-depth understanding of global chocolate consumption trends offering high quality products. To successfully penetrate the market Ferrero maintains a limited unique number of products manufactured and marketed at the highest quality possible. The company also seeks to understand the market properly by carrying out extensive test marketing of its products to avoid embarrassing marketing failures (Australian Trade Commission, 2012). Question One Ferrero Australian opened an online boutique that sells premium chocolate gifts packed in unique keep sake gift boxes. The online boutique was actualized due to consistent demands for Ferrero chocolate gift packs by customers for their chocolate loving friends and family. The gifts are customized, elegantly packed and contain a card for personalized messages (Ferrero Boutique, 2012). Ferrero decision to open an online boutique was a well thought marketing strategy in line with the changing consumer habits in Australia. The internet has become an integral and essential feature of the day-to-day social and business lives of billions of people around the globe and the internet economy is growing strong each day (Bughin et al., 2011). Ferrero Australia decision enabled many of its customers to have their desired products with convenience and efficiency as the internet enables customers to save time spent on shopping for gifts. Online stores makes it possible for consumers to make quicker decisions and shop as consumers can find time to perform ten searches online but only two searches offline for each purchase, with internet searches saving more time than physical directories (Chen, Jeon & Kim 2010). This boosts productivity for consumers, suppliers and manufacturers and translates into more profits. Through its online boutique store Ferrero customers in Australia are able to choose their preferred gifts with ease and the website offers price transparency, which is essential in developing customer trust and loyalty. This is because the online boutique service offers customers a reliable and stable source of gifts all year round with more consistency, which is a crucial marketing strategy to maintain customers. Using the internet to sell its products also offers the company the opportunity to advertise its high quality products all over the world. Their website helps to raise product awareness to a much more diverse customer base that spurs its sales volume. Bearing in mind that 90% of online users utilize search engines and internet searches represents 10% of the time spent by individuals on the web (McKinsey & Company for IAB Europe, 2010), it is possible for the Ferrero Company to expressly market its products to customers who are interested in chocolates in the web. This means that the company investment on advertising will pay off and lead to sales growth purely by using internet tools as it is possible to match the needs of customers, individuals, and organizations on the web requiring specific products. With the use of internet based transactions growing, one can confidently say the Ferrero Australia online boutique store will continue to pull in more revenue for the company as people social lives and businesses continue to be more centered on internet use at home and during work. In addition to supplying its products all over Australia, the company will also have a reliable and consistent distribution system all over Australia that enables it to save time and some costs passed on to its online customers. Among the leading confectionary companies in Australia, Ferrero was the first to introduce an online boutique offering exceptionally packaged and quality products to its customers; this increased its competitive edge over other confectionary companies as it scooped a new market without any resistance and competition. In addition to selling its products online, the company continues to compete successfully with other products in conventional selling points offering it a broader and diverse customer base in the Australian market. The power of social media means that friends and relatives share information about their interest in social media applications, which ultimately means that Ferrero products will be introduced to many more people by friends and relatives using the social media. This is a bonus for the company as it is free advertisement and marketing for its unique products. Will This Have Any Impact On The Company’s Other Business Segments? The online boutique store was a first for the company and required new administration systems and distribution systems. Any new business venture has new challenges that require careful solutions to fully improve them. The company, therefore, had to significantly change some of its key operations to serve the new marketing front. Despite this, the venture was mutually beneficial to the overall operations of the company. The online boutique store will have a very big impact on the company’s other business segments due to the increased customer awareness of Ferrero products. The brand name will become established and this will constructively contribute to the growth of the other business segments of the company, increased sales means that the company will continue to grow due to availability of resources for research, innovation, and new product developments and improvements. Conclusion The online boutique was a crucial response to emerging customer needs and it helped build customer confidence and trust as Ferrero proved they listen to their customers. Despite the expected and actual increased sales volume, the company did not need to employ more staff to handle the increased product traffic as all transactions are done online. The decision led to increased advertising and awareness of Ferrero products boosted by their uniqueness and quality and this is desired of all progressive brands. The decision was well-thought and well-implemented and the company should strengthen its boutique by introducing new chocolate products of the same quality and uniqueness as its trademark brands. Question Two Marketing is the life line of any company and Ferrero needs to embrace new marketing strategies to benefit from the emerging technologies and trends. Mobile Marketing The company should develop and execute an extensive mobile marketing strategy as mobile advertising provides richer options for messaging based advertising offers (Interactive Advertising Bureau, 2012). This is because it can enable Ferrero to engage and capture new media users using mobile technology (Spurgeon, 2005) and has the potential for long term benefits. Mobile marketing is effective because it ensures that the Ferrero brand advertisements reach their targeted consumers at all times of the day (Mobile Marketing Association, 2007). This strategy is not limited by customer lifestyles or schedules as most people carry their mobile handsets at all times of the day. By using location specific mobile advertising, this marketing strategy becomes more relevant and responsive allowing target audiences a chance to make quick decisions at the go (iMobile Agency, 2012). Mobile marketing can also be integrated with other promotion strategies in billboards, magazines, and packaging. One advantage of mobile marketing is that it offers consumers a chance to respond to advertising and marketing promotions as they can participate in contests and interactive marketing strategies where they send short codes to receive alerts, information and electronic coupons. Mobile phone marketing encourage the target consumers a chance to take action as soon as they see an advertisement, which also serves to give the marketers quick responses to all marketing campaigns. Mobile marketing also provides a new revenue stream when consumers interact with the messaging services (Mobile Marketing Association, 2007). This type of marketing also offers customers a lot of flexibility as they can easily join or leave a marketing campaign, thus, avoids customers getting offended by consistent advertising that can erode customer confidence on a brand. Good advertising ethic requires that marketers request their targeted audience’s permission for their adverts and this leads to greater response rates. Use Search Engines The use of vertical search engines is on a global increase with ten times as many products searches being carried out on amazon and eBay, which are both vertical sites like Google product search (Bughin et al., 2011). Today, most search engines are offering personalized search results with autonomous search agents making suggestions based on personal data, location metadata, and other advanced tools to offer more specific search results (Mobile Marketing Association, 2007). Ferrero can use this new frontier as a base for new marketing strategies as the increased possession and use of smartphones and other web connected portable devices facilitates developers to create applications that can be used to reach target markets. Conclusion Despite the benefits promised by mobile and search engines specific advertising, there are a lot of challenges that can limit the effectiveness of such campaigns; they include cost limitations, available technology, and the target market behaviors. Ferrero should incorporate marketing experts to analyze the viability of the new marketing technologies and their suitability to the Australian target market. They should develop innovative, simple to use and flexible mobile advertisement applications and promotions that encourage customer feedback that can guide them in the proper direction. The world is continually changing and the future lies in mobile marketing and search engine marketing and hence the company should prepare to venture into these areas for continued growth. References Australian Trade Commission. (2012). Ferrero takes a bite of the Australian market. Retrieved from http://www.austrade.gov.au/Ferrero-takes-a-bite-of-the-Australian-market/default.aspx Bughin et al. (2011). The impact of internet technologies: Search. High Tech Practice McKinsey & Company Chen, Y., Jeon, G. & Kim, Y. (2010). A day without a search engine: An experimental study of online and offline search. From working paper, School of Information, University of Michigan. Ferrero Boutique. (2012). Chocolate gift giving is our passion. Retrieved from https://www.ferreroboutique.com.au/about-us iMobile Agency. (2012). Mobile marketing strategy & promotion. Retrieved from http://www.imobileagency.com/mobile-marketing-strategy-promotion/ Interactive Advertising Bureau. (2012). October 2009: Change is in the air for mobile advertising. Retrieved from http://www.iab.net/insights_research/industry_data_and_landscape/1675/974217 Kotler, P. & Keller, K.L. (2012). Marketing management (14th ed.). Upper Saddle River, New Jersey: Pearson Education. McKinsey & Company for IAB Europe. (2010). Consumers driving the digital uptake: The economic value of online advertising-based services for consumers. IAB Europe Mobile Marketing Association, (2007). Understanding mobile marketing technology & reach. Retrieved from http://www.mmaglobal.com/articles/mma-understanding-mobile-marketing-technology-reach Spurgeon, C. (2005). Losers and lovers: Mobile phone services advertising and the new media consumer/producer. Journal of Interactive Advertisement, Vol. 5 no 2. ISSN: 1525-2019 Read More