UK Chocolate Market: Turning Green - Essay Example

Marketing Assignment TOPIC: The assignment should accompany the case study on Green & Black's (Part A) U.K. Chocolate Market: Turning Green. ANSWER THE FOLLWING QUESTIONS: Answer ALL questions Question 1 Critically examine the relevance of brand identity (e.g. Kapferer) in the context of integrated marketing communications (IMC) by using examples from this case. Based on the case study here the first thing that needs to be understood is the fact that G and B have so far cashed on their brand identity as a fair-trade brand.Brand identity is defined as a set of aspects that express what the brand stands for; its background, principles, purpose, and ambitions; and it precedes the brand image. A brand can have ethical appeal as in the case here or other attributes visual or inherent hat help consumers recognize the brand and to which consumers attribute specific meanings. Brand identity was first recognized at the beginning of the 1990's (van Gelder, 2003, pp. 35-36). For G and B brand image has been and still is a necessary step to build brand equity. One of the widely accepted definitions was created by Keller (1998, p. 92), which defines brand image as the "perception about a brand reflected as associations existing in the memory of the consumer (Martnez, Pina, 2003, p. 433). Or, it refers to the set of beliefs consumers hold about a particular brand (Kotler et al., 1996, p. 293), reflected by brand associations (Keller, 1998, p. 93). Consumption phenomena illustrates how our everyday lives are intertwined with shopping malls, Internet access, cars, market researchers, neon proclamations and fast-food litter. The phenomena dominates our material and retail instincts. The "ugly" part of this consumerism is the degradation on a planetary scale causing issues like e global warming, water pollution, deforestation and loss of bio-diversity. The relevant evil here is the excessive materialism that detracts from the true meaning of life and stresses on individualism desire and narcissistic tendencies. On the bright side the notion of consumption generates socio-economic cohesion alongwith the cultural platform for enhancing existential possibilities for individuals and groups. The global economy needs this consumerism as a necessary evil paradoxically a paradigm of creation and destruction (MacGillivray, Alex. 2000). The middle way out is to reconcile this with the rise of the green movement to achieved a trend towards sustainable and responsible consumption. So in the GB in general and Fair trade chocolate in particular is one of the incidents of this green consumerism which can be classified as a 'person and planet' movement because it focuses primarily on creating a health and well-being platform for individuals, producers and environments (Littrell, Mary A. and Marsha A. Dickson. 1999, Shaw, Deirdre and Ian Clarke. 1999). This form of Ethical consumerism will cover the 'green' concerns to form this perspective (MacGillivray, Alex. 2000). It is worth looking at the target consumer base which needs to arise from such fair-trade based brand imaging. The targeted consumer here for G and B is the Ethical consumer. The purchasing patterns of the ethical consumer are felt to be reflecting his feelings towards the good of the society over all through this buying behaviour (Ulrich, Peter and Charles Sarasin. 1995). The preference for Fair Trade products particularly chocolate has become a new trend with in the corporate world where consumers can express their concern about the ethical behaviour of companies by means of ethical buying and consumer behaviour. According to Doane (2001) ethical consumption is "the purchase of a product that concerns a certain ethical issue (human rights, labor conditions, animal well-being, environment) and is chosen freely by an individual consumer." So marketers have turned to utilizing this form of ethical consumption has involved environmentally friendly products, fair-trade products, the use of green products or organic food. The consumers will thus be reflecting their concerns for the ethical stance through purchase or boycott of goods for example fair-trade,child labour and wild life causes.According to a study by Hines and Ames (2000), 51% of the consumer base feels that it can make a difference to a company's behaviour and 68% claimed to have bought a product or a service because of a company's responsible reputation. MORI (2000) also reveals that 46% of European consumers claimto be willing to pay substantially more for ethical products (Ulrich, Peter and Charles Sarasin. 1995). The same study reveals that in comparison American consumers could pay 6.6% premium for green products .Another study reports on EU trends that French ethical customers would be willing to pay 10%-25% more for clothes not made by children (MORI 2000). However despite these promising figures research has actually shown that most of the ethical labeling initiatives like organic food, and fair-trade products, often have market shares of less than 1% (MacGillivray 2000).Many academics have rightly pointed out that attitudes alone are generally poor predictors of buyer behavior (Cobb-Walgren and Ruble 1995), particularly the social marketing area. The logical consumer is assumed to pay attention to the price, quality, convenience, and brand familiarity and this will cause an overall effect in the factors influencing buying decision.. Many academics have tried to identify the socially responsible consumer based on the age gap divide and trends of income and educational awareness.It has been noted that where as the younger consumer base is more conscious the target ethical consumer base is between 40-50 years of age. (Cobb-Walgren and Ruble 1995).A similar view has been taken by Dickson (2001) who has noted that age, income, and employment did not matter for the ethical consumers who attach a lot of importance one or other FT labels. In identifying this ethical consumer's key charactoristics then many studies state that the ethical consumer has high income, education, and social status (Ulrich, Peter and Charles Sarasin. 1995). The FT concept incorporates environmental as well as social issues. This higher price to the consumer is warranted by the higher wages that the producer will receive for their products and by the fair-trade control mechanisms in the trade channel (Littrell and Dickson 1999). This will mean that Fair-trade organizations, will go through a lot of hard work to convince companies to comply with laws and CSR obligations pertaining to fair trade. (Ulrich, Peter and Charles Sarasin. 1995). The question for inquiry is that to what extent conclusions from empirical research the various modes of the behaviour of the ethical consumer hold for the future of fair trade sales(Cobb-Walgren and Ruble 1995)and whether for G and B the ethical symbolism is enough to employ as a marketing strategy. In a qualitative study amongst ethical consumers in the United Kingdom, Shaw and Clarke (1999) note that fair trade was one of the most important issues of ethical concern with consumer behaviour as compared to issues like environmentalism and vegetarianism. But the question remains is this enough Therefore in the preceding sections it becomes imperative to choose a suitable approach to study decision behaviour is imperative to the validity and accuracy of an IMC plan. Several schools of thought have presented different perspectives and models for the consumer decision-making process. These can be categorized into four major approaches: the economic view, the passive view, the cognitive view and the emotional view (Schiffman & Kanuk, 2004). Question 2 Given question 1 above, discuss the issues associated with a successful re-positioning of the brand for the UK market in order to achieve its objective of becoming a mainstream luxury chocolate brand. (20%) The issues associated with this marketing plan are based on the cognitive practices defined above whereas the economic view postulates that consumers are rational decision makers, having complete knowledge and capabilities to identify the perfect decision. The passive view presents an opposing view, depicting consumers as impulsive and irrational purchasers. The cognitive view/consumer characteristics approach perceives the consumer as a 'thinking problem solver', and focuses on processes by which consumers seek and evaluate information to arrive at a 'satisfactory' decision. The emotional view holds that consumer decisions are driven by deep feelings for certain products or services (Schiffman & Kanuk, 2004). All these theories will form the basis of an IMC strategy for G and B. While all of these explain consumer decision-making from valid perspectives, the cognitive view or the consumer characteristics approach has been widely acknowledged by researchers as the most explanatory and powerful construct (Lysonski, S. et al 1996 cited in Kamaruddin & Mokhlis, 2003). It postulates that a great deal of consumer behaviour is 'goal directed' (Schiffman & Kanuk, 2004). The cognitive view acknowledges the importance of goal setting, achievement and motivation. This research is particularly aimed at discovering buyers' objectives from buying fashion clothes and the motivational dynamics involved.It recognizes that consumers are unlikely to obtain all available information about every choice, and are likely to undertake a decision when they perceive they have sufficient information about some of the alternatives (Schiffman & Kanuk, 2004). It focuses on cognitive and affective (attitude) orientations that relate specifically to consumer decision-making (Kamaruddin & Mokhlis, 2003). The issues involving the tailoring of a successful IMC strategy involve identifying and tapping into such consumer behaviour. De Chernatony and McDonald (1992) define a brand as "an identifiable product, service, person or place, augmented in such a way that the buyer or user perceives relevant, unique added values which match their needs most closely" (p. 237). It becomes necessary then for the business retailer to strive towards maintaining a sustainable competitive advantage through his business strategy as noted by De Chernatony and McDonald (1992) who have maintained that a retailer may adopt a number of strategies this .These have been stated by Davies (1992) as a multi fold criteria which can help the G and B strategy here.These would include Consumer Differentiation,brand imaging,premium pricing,Separate existence or valuation.Also relevant would be the psychic value of the brand.The aim then is to reduce the reliance on ethical symbolism here and focus on strategic marketing here which actually appeals to not just the ethical consumer base but is aimed at capturing a wider audience extending to more age groups. Question 3 Based on the discussion from questions 1 and 2, develop an IMC strategy to achieve Green & Black's communication objectives. (40%) No doubt the link between ethics and social responsibility is pivotal to a company's long term growth .From a business point of view "Good ethics is often good business" for brands like G and B seeking to cash on ethical consumerism. Marketing ethics have seemed to have manifested themselves with in regulation and codes of practice over the recent decades and these codes have increasingly curbed any attempts by the advertisers to mislead the audience.Today we have a revival of the conceptions of Corporate Social Responsibility. It is reported that ethical investment funds in the US were valued at 650 billion in 1996 (Punter and Gangneux, 1998).Also 1,400 companies have conformed to CSR rules since then.(Punter and Gangneux, 1998 cited in BSR) In America the BSR has played a vital role in reinforcing marketing ethics and corporate social responsibility. Other Ethics watch dogs have been established aswell and they promote ethical behaviour (see the Nader Page located on the Web at http://www. nader.org/). There is a newfound trend in marketing and business ethics where large corporations publicize their business ethics programs on the Internet. Take the example of Shell Oil, where, after a number of environmental and public relations problems, decided to commit to recyclable and environment friendly energy and publicly promotes human rights worldwide. G and B is like many organisations who are not only anxious to portray themselves as seeking high moral ground, something they call " ethical business" but also profit from it.In their article "Is it ethical to compete on ethics"Stainer A, Stainer L (1995) has taken the view that competition should actually be encouraged by ethicists and an overdose of ethics, (the Going Green trend) is not helpful in the promotion of good business. Is essential therefore for promotion of enterprise and this competition is "indispensable to free enterprise thinking." Therefore the aim is to look around for a consumer strategy to communicate other attributes like quality and appeal rather than a reliance on ethics to market G and B chocolates.This will involve a perusal of the buying Behaviour processes based on the query that why would consumers make certain purchases and what kind of factors economic and social can influence the consumer purchases in the society.So when we look at the consumer reaction to such changes it translates into his buying behaviour which has to be tapped into in order to achieve success..This would entail a Marketing Mix (MM) strategy to tap into the preferences of the consumer base. There are five dimensions of the customer buying behaviour; these are shown n below figure. Figure: THE FIVE KET DIMENSIONS OF BUYING BEHAVIOUR (Jobber, 1998) The answer to these questions can be given through direct contact with consumers (in a retail environment) and increasingly by using marketing research for and G and B chocolates. Consumer Buying Decision Process: Buyers can further be understood by studying the consumer buying decision progress. This can be seen in below Figure; Below Figure: The consumer buying decision process and influences (Dibb et al. 1997) Possible Influences on the decision progress Personnel Influences Psychological Influences Social Influences Demographics Situational Involvement Perception Motives Learning Attitudes Personality Roles and family References groups Social classes Culture and subcultures Consumer buying decision process Feedback G and B for its future strategy is facing a great challenge in terms of maintaining market sales, sales values, and profit. Its competitors have been growing since the early time of the introduction of our product. Growing competitors reduces market shares and constraint the company's profit (Kotler, Armstrong & Cunningham, 1999). Nevertheless, taking into account the five market forces, addressed by Porter (1997), the company adopts a variety of marketing and advertising campaign, including mergers and acquisition to maintain our market share, be competitive, and even have comparative advantage over our competitors. This can allow G and B to keep growing despite this competition. To maintain market share, G and B will need to introduce new product lines and which will which later improves its sales and it can also consider a merger with another chocolate main industry player which does not entirely focus on ethical consumerism but has a brand identity based on other factors like taste and quality. According to Porter, "the essence of strategy formulation is coping with competition" (1997, 2). It is rooted in the economy, he said. The five forces that the company is facing associated with competition are customers (both direct and indirect), suppliers (both direct and indirect), potential entrants, and product substitute, which as previously mentioned early in its future strategy, is to produce chocolate brands based on their high premium quality. From the following diagram, it shows that the major challenge to the company position in the market. It is facing six major sources of barriers to entry. Price, product, place and promotion are the basic marketing considerations (Kotler, Armstrong & Cunningham, 1999; Smith, 2006). The price indicates the marketing mix that produces revenue; it is subject to an array of competitive forces. This competitive forces, which is adopted from Porter's (1997) five strategy forces of competition described as follows: And as one of the leaders in the industry, the G and B can control the emergence of the new entrants by maintaining its economies of scale, increase its marketing and advertising campaign to offer product differentiation, invest in research and development to produce new product line, tap into the market advantage that the new entrants do not have, have established distribution channel, and need to understand and adhere to government policy. Sometimes, government may use it policy to limit new entrants.In this industry, buyers' bargaining power may have less influence than the suppliers' bargaining power but it depends on several characteristics of the "market situation and on the relative importance of the sales and purchases to the industry compared (Porter, 1997, 5) with its overall business. Competition is becoming intensive and concentrated. Buyers may also affect the company's profits. Therefore, the marketing strategy may include the consideration of whether producing at the similar scale but with fixed cost while meeting customers' demand, differentiating the product line, branding or repackaging to attract buyers' attention, or lowering the purchasing costs and reducing the price because buyers are price sensitive. The retailer power may be treated similar to that of the buyers.Effective strategy will be crucial. Therefore, in order to increase profit, the G and B needs to improve its strategy option and emphasize it on the suppliers and buyers who have less market influence (Porter, 1997). It can also improve our sales and hence maximizing the profits through product placement, because psychologists understand that reinforcement such as this is effective to increase sales. Also important for G and B is the Marketing mix strategy that includes target market and positioning, the price should be consistent with market segmentation, positioning strategy, and other elements of marketing strategies. Besides this, the company can balance or mix between competitors and complementers. In order to gain comparative advantage over the competitor and maximize sales, G and B may need to consider incorporating between the six imperatives marketing strategies of winning over the competitors and four principles of complementers. The six imperative marketing strategies that can be used against the competitors are: Determine or recommend the market; Identify the target market and market segment; Set strategic direction and positioning; Design what Dr Pepper and its product line can offer; Secure support from other functions within the company; and Conduct market monitoring, control, execution, and performance The four principles of complementing on the other hand which can be used by G and B are: Selective and concentration Customer value Differential advantage, and Integration Setting strategic direction and positioning and designing what product to offer to the market can be completed by differential advantage. And securing the support from other functions within the company and to conduct monitoring, controlling, executing and performing can be complemented by integration. . In order to be competitive and hence to maximize profit, it is also necessary for G and B to consider the following framework: (1) Identify who are the competitors (2) Describe what the competitors' abilities are, what difficulties they have faced when they launched their new drug (3) Evaluate other options of their marketing strategy (4) Project or predict what are their next marketing strategy would be either in short-term, medium-term, or long-term. The above framework cannot be achieved if there is lack of understanding about the competitors' insights - their perspectives and their uniqueness or niche. Knowing the competitors insight is crucial. It is a way to understand the customers' demand, needs, and this makes the company to be able to retain the customers. Deciding how to use effective marketing strategy requires the understanding of the structure of competition. This structure includes direct and indirect competition, new entrants into the market, buyers, and suppliers. In addition, in analyzing the competitors, for example, framework of analysis may include: Competitors' organization such as: Infrastructure, which is on a structure that defines roles and responsibilities or each function. Processes, which is the competitors information, their control and reward systems. Culture, which is the norms, standards, beliefs, and values that determine how the people in the company operate Strengths and vulnerabilities, including: Assets and liabilities, which are financial information, other information about the company organization, human resources, political view, and capacity. Capabilities and competencies such as activities that make the company to be a outstanding in the market among their competitors The companies environment such as Value chain, which includes major marketing projects the competitors do and how these activities have an impact on the both the buyers and the suppliers. Alliances or networking are the link between the competitors and other companies and the company itself. Mindset. Each firm has been established two carry its own judgments and assumptions. Current strategies and performance may include: Market strategy. You need to observe what the competitors do in the market Obtain sources of commitment for expansion of factories or existing plants, building new manufacture, increase or invest in research and development or other commitment to various businesses Use performance to the measure the competitors' successes by analyzing their market, financial performance and other measures. As in ethics, competitors 'data need to be secured from the level and type of data from the external or the internal access of those who are not classified, the information should be stored properly in a secured place to protect it from any leakage. Competition can be complemented as a marketing strategy. Complement, by definition, is any effort that influence the company's marketing strategies that have direct impact on sales. G and B therefore needs to consider Who are our current competitors (today) Potential competitors (tomorrow) Who are our direct competitors Indirect competitors What are our competitors' capabilities and difficulties What are our competitors' strategic options What do we expect our competitors to do How can we get our competitors to do what we want Profit maximization can be achieved in this extensive competitive market if the company is able to incorporate its marketing plan, analysis, decisions, strategies, and implementation by taking into account the recent trends in the changes of consumers' life style and taste and in company's reorganization trends of more home-grown expertise. Success should not be considered as short-term but a long-term profit. The different marketing strategies represent a venue that helps the company to also learn from the competitors' marketing strategies, be innovative and creative in developing new marketing strategy that is more eye-catching and yet, can make the sales. From the marketing strategy point of view, it is the company's objectives to survive in the market, to maximize sales, market share & quality leadership. Forming alliance with local partners, global companies are able to tap into the local market. Similarly, it can also apply product placement and competitors vs complementers in order to gain comparative advantage over its competitors. Competing and complementing also enable G and B to control the competitors, the market, and the buyers; thereby, it can maximize its profits. 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