Communication Strategy to Promote Range of Brown Sugars - Case Study Example

 Communication Strategy to Promote Range of Brown Sugars SWOT analysis. Strength There is strong reason for the Chelsea Sugar Company to proudly boast of its brand Chelsea Sugar, for it is an iconic brand name in the true sense, and the company has continued to occupy its place amongst the top 100 companies of New Zealand for the last several decades. Operating under the name of the New Zealand Sugar Company, Chelsea Sugar is a product that appeals to the consumer in a very sweet, emotional and sensual manner and is a household name in the country, having gradually diversified into several sugar related products that range from sugars for everyday use such as normal white refined sugar, raw sugar, icing sugar and organic raw sugar to more varied and specialty sugar products like baking syrups and syrup toppings. Its range of brown sugar include lot of variants that can be suited to the palate of all age groups and segments, such as, raw sugar, organic raw sugar, soft brown sugar, dark cane sugar, coffee sugar and demerama sugar. The excellent brand image of the company is strongly imbedded amongst customers and it has established itself strongly not only in New Zealand but also in Australia and all the South Asian countries. The company boasts of all its products being suitable for vegetarians and being Kosher and Halal certified and satisfactorily meets the demands of its national and international customers. A major strength of the company lies in its proactive strategy of being well equipped with comprehensive market knowledge as also in meeting the needs of its customers. It operates in an environment that is internationally competitive especially in view of the deregulation of the sugar industry done by the New Zealand government in 1986, whereby the New Zealand Sugar Company has to operate in a market that is exposed to free market forces internationally. Most sugar companies in the world enjoy the patronage of local governments by way of tariffs, quotas and license systems to discourage import of foreign sugar, but in New Zealand, Chelsea Sugar continues to be the market leader despite such challenging circumstances, which is indeed the core strength of the company. In the present business circumstances of an almost perfect competition scenario prevailing in the world sugar market, and an over abundance of production by the top sugar producers of the world that comprise of countries such as Brazil, India, USA, and Australia, the sugar prices are very competitive and sometimes they are very volatile to an extent that excess production of sugar is virtually dumped in markets at prices that are lower than the cost of production. Weakness In this scenario, the New Zealand Sugar Company is faced with stiff competition from not only the Asian countries but also from the bigger sugar industries of nearby Australia that pose a constant threat to its stability in consistently holding on to its top status in the New Zealand sugar market. Added to this is the infamous decision of the New Zealand government in 1986 to deregulate the sugar industry, which implied that the company had to operate in a totally free market that, unlike most countries, did not protect the sugar industry by way of tariffs, duties, quota and license systems. This is considered to be a major weakness of Chelsea Sugar, which greatly and adversely jeopardizes its marketing efforts to capture bigger chunks of the sugar market internationally. Most countries, in view of vast differences in cost of raw material and the essential nature of the commodity, protect the sugar industry from international price fluctuations, and where required, offer subsidies to enable the common man to afford the commodity. But Chelsea Sugar has to hold on to its own, and face stiff competition as also the adverse circumstances created by not only such protection, but also the dependence for raw material on a widely fluctuating market for raw sugarcane juice which has proved to be highly erratic and inconsistent from suppliers who are located in far away countries such as Mauritius, Brazil and India. Another weakness relates to the sugar industry as a whole since intake of sugar is in general not considered to be healthy and more so in the face of the increasing number of its healthier substitutes appearing in the market such as aspartame, sucralose, acesulfame potassium, saccharin and neotame Opportunities In spite of some weaknesses that are invariably faced by any given country, there are several opportunities waiting to be tapped by an aggressive and proactive company such as the Chelsea Sugar Company. There are continuous innovations being made in the sugar industry for a wide array of sugar products that are flooding the international market, and Chelsea sugar is very well placed to tap the market by using its creative abilities in transforming consumer attitude towards its brown sugars by exemplifying a more energetic and healthier lifestyle for them. It has bright prospects to influence all segments of consumers in view of the product’s wide nature of uses in different functions, and also has the ability to relate emotional and attitudinal issues with its new range of brown sugars as has been done via its advertisement campaign “Two Spoons” whereby the target segment has been literally revolutionized into associating themselves with the kind of sensuality and excitement portrayed in the ad. The health conscious individual is today seeking opportunities to buy the best products that protect health and provide extra utility value for the money that he spends. Although in realty there is not much of a difference between white and brown sugar in terms of nutritional value, but recent trends have shown that the sugar market is gradually witnessing a change in preferences towards brown sugar products due to the marginal benefits the molasses content offers by way of minerals such as calcium, potassium, iron and magnesium. Presently the biggest opportunity for Chelsea Sugar is to tap this preference in customers and go for it in a big way to enhance its market presence not only in New Zealand, but also in other countries, thus implying a multicultural and multi user profile for the brown sugar products. Threats As is the case with all consumer products, sugar too is produced by several companies who are constantly vying with each other to woo the customer, there is a constant threat for sugar companies from each other to capture markets by coming out with innovative products. Hence Chelsea Sugar, in spite of its excellent reputation and brand image, has to constantly face the challenge of winning over the customer in the face of a constant flooding of the market with new products. Added to this, are the excellent advertising campaigns of its competitors that regularly appear in the media and pose a serious threat to Chelsea in regard to winning over new customers. Its competitor, Pam’s Brown Sugar has been presenting flashy and creative advertisements in all the media that specifically appeal to the ‘educated liberals’ who comprise the most potential class of customers for brown sugars in view of their propensity for new products and fast changing preferences for consumer goods. It is apparently going to be a daunting task for Chelsea to match the creative ability that Pam’s advertisements have already exhibited in winning over new customers. With improved media choices, innovations are now being highlighted by competitors using advertising and other promotional tools that have led to a perfect competition for this product implying that profit margins are now more dependent on volumes which requires tactical efforts to attract the customer into buying the company’s product. The present trend of weak global prices for sugar in most countries is a big threat by way of an uncertain future for the sugar industry. Sugarcane production varies in most countries due to the uncertainty factors such as failure of monsoons that greatly curtail the quantity of sugarcane harvested, which directly influences the cost of production of sugar. These threats have to be satisfactorily handled by the Chelsea Sugar Company to meet the challenges. Positioning Statement Sugar is a product that has been used down the ages in satisfying the human urge for sweetness. It has the potential to change the emotional pattern of thinking and can be used to win over a loved won during difficult times of negative mood swings. Love is sweet and so is the brown sugar from Chelsea sugar. There is immense potential in using different techniques to address the urge of humans for this product by appealing to their need for love, happiness as also to add on to the sensual moments in one’s life. When the mention of sugar is made, the common man thinks of the white granulated refined sugar that is used as the everyday sweetener of the food and drinks that we consume. However recent trends do indicate that more and more people are gradually becoming aware of the additional advantages of brown sugar. With the introduction of brown sugar as a substitute for white sugar, people who are now more health conscious have come to realize that with it they can savor the natural flavor and minerals and avoid the intake of chemicals that are used in white sugar. In this context the Chelsea Sugar Company has the opportunity to tap such advantages for its new product. The advertising agency knows that this is one product, which provides a vast choice of strategies to use in appealing to the human psyche for their need to add sweetness in their life, in addition to making the product associated with the Kiwi national pride that every patriotic citizen will feel privileged to patronize. Sweet moments are difficult to come by in today’s hectic and stressful world and if such moments can be provided with Chelsea brown sugar, why not. A strategic marketing plan will have to be chalked out by first drawing a perceptual map of consumer preferences and positioning the product so that they are in sync with the aspirations of consumers. Brown sugar and its by products are rich in aroma of tropical sugarcane, are produced such that natural flavor and color components are retained, no chemicals are used in its production process, and it is free from harmful chemicals such as phosphoric acid, sulfur dioxide and bleaching agents. In this context it is helpful to do a perceptual mapping for the different perceptions of consumers in regard to different variants of sugar so as to evolve a positioning statement to make brown sugar a success story for the Chelsea Sugar Company. CONSUMERS Adult Good Brown Sugar (Cheap, Healthier) Best Honey (Expensive, Healthy) Not New Zealand New Zealand product Products Maple Syrup Child Bad White Sugar (Not much utility) (Cheap, Unhealthy) As can be seen in the above diagram perceptual mapping is a method and means to display the different perceptions of customers in regard to preference patterns of different consumers who have taken part in the survey that aims to ascertain whether brown sugar forms an important aspect of consumer preferences. This diagram can be successfully used by the Chelsea Sugar Company to formulate its positioning statement for brown sugar and related products. The percentage of population that may be prone to patronise brown sugar can be fairly judged by translating the number of respondents proportionately for the given population in the target area. This perception map assumes that consumers have their sugar and sweetness perceptions on two dimensions and the respondents are clear in their responses that there is maximum perception in favor of white sugar and brown sugar coupled with molasses products. This result implies that consumers will mostly decide whether to go for white or brown sugar, and the responses in the perception map clearly indicate that the Chelsea Sugar Company will formulate its strategies so as to exploit the increasing preferences for brown sugar. Having drawn the perception map there is need to formulate the positioning statement that is also referred to as brand strategy or positioning strategy. The Chelsea Sugar Company will have to evolve a clear description of the core target audience to whom the product will be directed, and a picture that is compelling in regard to the brown sugar will have to be placed before the target audience in relation to their perception of the product. The preferences can be further increased by formulating a strategy for marketing that will appeal to the different market segments in a way that consumers see Chelsea brown sugar as a personal asset that will add value in their lives. There is propensity of different target segments to be motivated by different motivation strategies on the basis of their priorities relating to health, patriotism, emotions and sensuality, and thus the positioning will have to be done accordingly. More over, the target audience based on the attitudinal and demographic distribution of the central prospective of product appeal will have to be identified. In the context of the target audience for Chelsea, since the more sophisticated, and those having liberal attitudes and outlook to life, and people adopting multi cultural eating habits, are prone to being conscious of the additional advantages of brown sugar, the areas where such people reside and the markets that they frequent have to be targeted so that the added advantages of brown sugar and related products are highlighted and accordingly enable transformation in the buying habits of such people for this product. Target Market The target audience will comprise of the entire population, although the strategies to target different segments will differ. The younger generation and the liberal minded who have a faster propensity to change their consuming behavior, and who are health conscious too, are not rigidly attached to the use of white sugar. They understand the benefits and are aware of the additional nutrition value of the brown variety that is also an ingredient in the delightful brown muffins and other brown confectionery items that are much stronger and punchier in taste and are thus in keeping with their aspirations and outlook of life. Shifting to brown sugar does not entail additional expenses and it is in fact a better option for health as compared to white sugar and hence the additional advantages can be highlighted and people can be made aware of the same by way of related marketing and advertisement campaigns, which will have to be associated to the emotional sentiments of the relevant segment in regard to their aspirations. The use of this product will not lead to any adverse side effects nor any change is required in behavior patterns of consumers. There is no reason for any consumer to refuse the use of brown sugar except those who do not prefer the faint smell of molasses that is mildly present, and this quality can be highlighted as being beneficial in the use of confectionery that requires strong flavors. The market can be divided into sub segments to differentiate the marketing strategy depending on the demographical and economic status of different segments. Questions that need to be addressed before segmenting the market will be issues such as: Does the product motivate the prospects? Does the segmentation differentiate the brand within the competition? Is the product creditable and does the market segmentation enable growth and whether it serves as a filter for brand decision making? With proper segmentation buyer behavior can be measured in terms of the sub segments that are pivotal in influencing the tide in favor of Chelsea Sugar. A particular segment to be targeted is the “Educated Liberals”, who comprise almost a tenth of the entire New Zealand population and who command a large market share for consumer and personal durable products in view of their flexibility and openness to try new products and are characterized by their progressive and individualistic out look of life. These are the people who strongly believe in maintaining good health through healthy eating habits and exercise. They are well educated, prefer to live in urban areas, thrive on richness and diversity, have an intellectual bent of mind and have very liberal views in looking at social and political issues. A strong trait of this class of people lies in not relying on advertisements to make their purchase decisions. Consequently an altogether strategy will have to be adopted to motivate them by using a different mix of promotional tools. A varied mix of personal sales campaigns, brochures, and direct marketing will have to be used to attract this segment by appealing to their emotions, liberalism, nationalism and attitude of social concern by attaching the qualities and utility of Chelsea brown sugar to these traits and attitudes. In times of perfect competition merely highlighting the product’s quality is not enough for making it a success. The product has to be associated with lot of emotions and excitement that has to be a means to genuinely attract the customer by relating with his aspirations. All the advertising media choices and promotional tools can be used to make the campaign for the product highly result oriented. Decision making process Behind every action of purchase by the customer there is a decision making process that every marketeer must investigate. The five steps in the decision making process are in fact the stages the buyer passes through in making choices about what products and services to buy. Every set of consumers faces certain problems in patronizing a product due to the several choices before him. He may be finding it convenient to buy sugar of a particular brand from his local super market where Chelsea brown sugar may not be stocked. He may not be prone to taking the risk of trying out a new brand for fear of its not meeting his expectations. Such problem recognition has to be resorted to by marketers to perceive the difference between the person’s ideals and actual situations that can enable triggering a decision to purchase the product. This process can be a very simple task of noticing something lying in front of the consumer or it may have to be activated by hectic and planned marketing efforts. Information search in the decision making process is an attempt by the consumer to seek value by internal and external search so that he can clarify the options open to him to facilitate decision. Internal search implies scanning one’s memory for previous experiences with such products and for most products the consumer’s sub conscious mind gives him indications about the experience. When past experience of such a product is limited then the choice becomes difficult and risky in making the purchase. Hence marketing efforts by Chelsea have to be directed towards making the consumer to relate experience of brown sugar with some previous good experiences. In this regard the most effective tool is an advertisement design that addresses the consumer’s aspirations by relating the product with all that inspires him and sets him into action. It is in this context that several companies use brand ambassadors to vouch for the product in having been tested by them and having proved to be of higher utility than their expectations. If such a strategy is carried out by Chelsea brown sugar, consumers will get over the problem in having uncertainty about the product and can safely become customers. Evaluation of alternatives implies the clarification search by the consumer so that criteria for purchase can be ascertained and consumer value perception can be developed. In this way brand names that meet the criteria can come forward and this is precisely what Chelsea Sugar has to adopt by influencing the consumer mindset in a way that the first brand which comes to the consumer’s mind as a result of its marketing and advertisement activities, must be that of Chelsea Brown Sugar. Value perception for the consumer can be developed by involving brand ambassadors as was done by using the services of Jo Seger. In keeping with the changed consumer perceptions, another brand ambassador, who is presently enjoying immense popularity and credibility amongst the consumers and who can appeal to the new generation en masse must be engaged so that the tide turns in favor of Chelsea’s brown sugar products and the product can capture a bigger chunk of the market. This brand ambassador, in view of his credibility and the trust he enjoys with the people, will be trusted when he claims in the advertising design, by way of any specific example, of his total confidence in Chelsea sugar in meeting to his emotional expectations. The purchase decision connotes the value proposition that the product has in the consumer’s viewpoint which depends on considerations such as terms of sale, past buying experience and return and exchange policy, which are all in turn influenced by time pressure on the consumer and pleasantness of the experience in shopping. These factors enable decision about the place to buy from, when to buy and whether to buy or not. Here again Chelsea can greatly influence consumer decisions by tapping on the consumer need to have a soul touching experience, to have a romantic interlude, to have a peaceful meeting with a friend, or to have some exciting moments, by giving them that extra bit that others don’t give. The very decision of buying Chelsea brown sugar can be associated with an immediate incentive being given by way of for example, a nominal discount on the next pack that is bought by the customer. Chelsea can improve customer experience by opening their own chain of coffee shops and confectionery outlets. It is essential that the customer must have a delightful experience of the product post purchase, and he must experience value in the consumption and use of the product. After purchasing the product the consumer compares it with his expectations and is either happy or unhappy with the product. If he is dissatisfied it will adversely effect his value perceptions and there will be no repeat purchase thus rendering all efforts on the part of Chelsea as futile and wasted. There have to be relation-building efforts with consumers and they must never have post purchase psychological anxiety or tension or regrets in regard to the purchase. Hence relation building between the seller and buyer has to be developed on a positive note by way of advertisement campaigns and involvement of brand ambassadors. Having taken the required decisions and having adopted the strategies in keeping with the flow of the decision making process of the consumers of brown sugar in New Zealand, the Chelsea Sugar Company will be in a dominating position to judge remedial set of decisions in formulating its own strategy of making a proactive marketing strategy in keeping with the expectations and aspirations of its customers and to be in good stead for a long time. Its brand image will be strengthened and fully established to make a stronghold in the sugar products industry not only within New Zealand but also in Australia and other South Asian countries to start with. If the products are manufactured and presented to consumers in keeping with their expectations, there is no reason for the company to suffer any set backs despite the weaknesses and threats it faces in an industry that is characterized by government protection, tariffs on sugar export and subsidies for domestic producers in most countries. It is indeed a dominable task for a sugar company to fare in such an extraordinary way in the face of difficulties and challenges that are not faced by other such companies in most countries. References http://www.chelsea.co.nz/, Accessed on 17.8.08 Levenstein, Harvey. Revolution at the Table, Berkeley University of California Press, 2003. 32-33 Pinder Maurice, I’m Sweet Enough, Jan 2006, http://www.newscientist.com, accessed on 17.8.08 Ries A, Trout J Positioning: The battle for your mind, Warner Books McGraw-Hill Inc, New York, 1981, ISBN 0-446-34794-9 Things Go Sweet at Chelsea Sugar, http://www.electricalautomation.co.nz/afa.asp?idWebPage=13579&idAdrenalin_ArticlesAccessed on 18.8.08 Trout J and Rivkin S The New Positioning, The latest on the worlds #1 business strategy, 1996 McGraw Hill, New York, 1996, ISBN 0-07-065291-0 Read More