Awfully Chocolate “ A vision of the perfect chocolate cake”
MARKETING IN UNITED KINGDOM REPORT
The brand, under discussion in this brief namely, Awfully Chocolate is the brain child of Lyn Lee who began this business venture in the year 1998.Today the company has seven stores in Singapore alone three of which are global concept stores. The company has since then also expanded its operations into other Asian jurisdictions like Hong Kong, Shanghai and Taipei (BBC, News, 2010). This is a promising brand as now it is diversifying its operations into fast food joints, theme based bakeries and restaurants (ibid). The domestic marketing strategy of this company delves into the technique of differentiation. It has also been observed that one of its marketing strategies is not to use commercially available chocolate materials but by sourcing cocoa beans as the brands own specifications (ibid).
The enterprise has an excellent marketing mix strategy in Asia motivated by a group of young and motivated business people. The company began informally and expanded very slowly. Till date it has restricted itself to the Asian jurisdictions. The company has deliberately restricted its product base and initially it sold only one product, that is the perfect chocolate cake through their outlet in Katong in the year 1998.After that the cake has been available in many variations namely chocolate banana, chocolate rum and cherry (AC, 2010). In 2004 awfully chocolate introduced chocolate ice cream with the brand message- “not too sweet or too creamy” premium Chocolate cake ice cream”. Currently the company has around 17 franchises and licenses to operate in places like Indonesia, Taiwan, China and Hong Kong with more than 130 staff. Since its inception, the revenue of the company has grown by 20 percent each year (ibid).
There are a number of interesting things to note about the journey so far undertaken by Awfully Chocolate, one of which is clearly the fact that it has not endeavored to expand into Europe or the United States (GBI, 2008). A number of reasons may be the case here, like the lack of funding or the lack of infrastructure, which can allow Awfully, chocolate to tap into the British market which is extremely promising as far as the consumption of sweet desserts is concerned (ibid). Not only is the European market extremely promising for Awfully Chocolate (hereinafter referred to as AC) but it is also full of potential if AC would like to introduce other products there in the future (ibid).
This is apparent from the statistics below GBI (2008)
The reason the manager is not opting for another Asian jurisdiction in this regard is simply because most of this market is already taken up by AC already with most of the premium paying locations already having its branches. It is doubtful if there are any more locations where AC can keep up its simple yet high street image while still being able to charge a premium price for the same. The US has certainly gone into recession and it is unlikely that the “less than flashy” and “non-commercial” approach of AC is going to be of any benefit to the already heavily commercialized US market. The manager believes that this is the case despite the fact that the US market has always embraced, to some extent innovative advertising strategies. However when we look at the UK market it is possible to note that it has had a steady growth in its Chocolate confectionary and product sector.
According to a 2010 Mantel Report in the UK, Chocolate confectionary businesses have a tremendous potential in the UK (Mintel, 2010). The Chocolate confectionary market in the UK right now is thriving because cakes and other chocolate relate bakery items remain a top snack choice for consumers and are almost always bought as items of personal and emotional fulfillment by heavy “ snackers” .The same remains its attribute as a major comfort snack due to its convenience and availability.
However based on this Mintel Report (2010) and other current observations about the UK industry the manager would make the following preliminary recommendations about its perceived entry of strategy into this market. First and foremost AC will have to shift into a more comfortable realm of business, which is more common and commercial through some intensive advertising. The question is then how will an Asian brand differentiate itself in a market, which is known to have some of the most serious chocolate connoisseurs in the world. Britain has a history of producing some of the best chocolate items and confectionary in the world only to be rivaled by a few other western jurisdictions like Belgium, Spain, Germany, France, Italy, Hungary, Poland, Czech Republic, United Kingdom and the United States. Furthermore since the chocolate cake has always been more of a “Western” form of dessert, AC might have initial problems “selling” a chocolate cake to the public of a jurisdiction, which actually invented the Chocolate Cake and other confectionary delights. This will not only mandate changing the current marketing strategy (or the lack thereof) which might have worked for it in Asia, but is unlikely to help it overcome the cultural barriers to market entry in the United Kingdom chocolate confectionary market.
This may however prove to be an interesting journey and a challenge if taken up properly by AC because it has also been noted that the “green” and ethical realm of chocolate sales has actually grown in the past 4 years, especially since the fair-trade coffee trend caught up. This has been particularly true for ethically produced fair-trade products which have since 2009 been found to be more popular. 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.” This should be at the forefront of AC’s new marketing mix strategies, which will allow it to push further for success.
Advertising and attractive displays will also become particularly important here as the parents continue to maintain control over the purchase of the chocolate confectionary consumption of the age group of consumers under the age of 16. This means that the attractive advertising strategies and health conscious statements unless widely advertised will not induce the parents into allowing consumption of the same for their children. Interestingly enough despite that fact that AC has enjoyed the luck of a premium priced somewhat high street brand in Asia, it is unlikely to be able to rival Marks and Spencer, Thornton’s or even Haggan Daz. The tastes of the British public may not be ready for example for chocolate cake cooked with Asian preferences of taste. While Britain has always welcomed foreign novel Asian cuisine, the marketing of an Asian chocolate cake will take more innovation and rethinking of the original AC recipe. This will require a lot of market experimentation and tasting by segments of the general public in Britain in order to ensure a successful market entry (Gerald, 1996).
There is however a problem in capturing the middle class young and juvenile consumer base. According to the same Mintel Report (2010) mentioned above “ Four million, mostly more affluent middle-class consumers, actively avoid buying chocolate confectionery for their children”. This would mean that the typical AC consumer has to be affluent, less health conscious and definitely over the age of 25 with a stable income. It would also serve well to capture the ethical UK market at this point as AC already uses its own chocolate raw materials or cocoa etc as a market differentiation strategy anyways. If it can switch instead to a fair-trade brand of raw materials it is more than likely to experience initial success through emphasizing on its green label (Doane, 2001). AC might also benefit by ensuring that it can cater to the health conscious parts of the population consumer base as the report also reveals, “Almost two fifths of consumers are buying less chocolate confectionery for health reasons, opening up opportunities for a wider range of lower fat/calorie options” (Mintel, 2010).
A final word of caution about the UK public chocolate consumption is that by traits the UK consumers are, “creatures of habit’ when buying chocolate confectionery – only a tenth are adventurous enough to be trying new chocolate flavors or formats”(Mintel, 2010). This can be a clear market barrier to market entry as far as the initial marketing strategy of AC is concerned. AC has a casual approach to marketing where it hopes the consumer will come and look and develop a liking for the scantly advertised product. If appearance is anything to go by it is possible to note from the marketing strategies of Thornton’s, Haggen Daz and Marks and Spencer that colorful and mouthwatering displays of chocolate confectionary, which tempt the consumer base, play a key role in their in-store marketing. None of AC’s current stores are similar to each other and have till date utilized different themes of like retro, swing and other all white simplistic interiors, which do not have any provision at all for cake displays.
As far as a new marketing mix strategy for AC is concerned, it might be possible to analyze the situation of AC through the following table based on the 7P framework of the MARKETING MIX (Lazer et at, 1962, 1973). The views in the table below are based upon the theories of Kotler (1976) and Kotler and Armstrong (1989) :
|The Product: Whether the organization is creating what its target consumer is looking for? |
This is not true in the case of AC, which must re-strategize its selling culture and cater it more to the European context and buying strategies where there is a clear emphasis on commercialism and candy that “meets the eye”.
Recommendation: AC should change its recipe to homogenize it to the local tastes and then work extensively in brand formulation strategies, which know how to get the message out there.
Possible new products: Ethical products and health conscious products in the confectionary business.
|Price: How much is the target consumer base willing to pay?|
AC needs to consider its pricing strategies and make sure they are more completive against Marks and Spencer, Thornton’s and Haggan Daz
Recommendation: AC can try to sell its product at a lesser price through Tesco and Asda retail chains instead of zeroing on separate retail chain stores initially. This may give it a good market entry.
|Place: Is the product being placed correctly in market with the right qualities and the right timing?|
This is unlikely to be the case in the extremely consumerist marketing trends of the Western jurisdictions and it seems that the current marketing strategy of AC will not fit with the display based and largely commercial demands of the UK confectionary industry. One only has to look at the lovely displays at Marks and Spencer, Thornton’s and Haggan Daz to realize the importance of the UK consumer and perhaps any consumer to relate to the appeal of their taste buds as it comes from the allure of sight rather than the knowledge that there may be a “perfect chocolate” cake lying somewhere in a fridge at a shop.
|Promotion: What is the firm strategy for informing or educating the consumer base about its products and promotions?|
This is AC’s main problem. The complete lack of advertising as discussed liberally elsewhere! It’s online interface remains mediocre and it could still tap into the cyber market of European chocolate cakes before it actually establishes a physical presence there.
|People/participants: The people who make up an organization whether managers||Recommendation:|
There is a clear deficit of knowledge workers in marketing and chocolate cakes in the UK and effort will have to be made to create a thorough survey of the future UK consumers or supply chain persons directly or indirectly involved in any aspect of the consumption or the production/provision of the sale of the Chocolate Cakes and other AC products as a means of altering its current service strategy.
AC must change and vary its recipe and production, packaging and display procedures.
|Physical Evidence: The marketing and service environment||Recommendation:|
For AC the promotional aspects of service delivery all form an important part of ensuring consumer retention and consumption especially when it comes to the UK market
This Project and its activities have allowed me to realize that a successful business manager cannot succeed on the basis of creativity alone but he also needs well-established organizational and managerial skills. For the same purpose the journey of learning of a business malinger both in education and practice remains from many angles that of a combination of psychological, reflective, learning and self-improving dimensions where as the learning strategies and conducts during the course of interactions during study can be related to a number of learning theories (Gibbs, 1988). In my, during my time of learning this case the Gibbs learning theory was largely based upon the reflective dimension bordering largely upon a reflective paradigm of enhancing practical and individual development. In this vein Boud’s learning strategy proved for me a solid ladder through which I could consciously climb into an individual evaluation and analyze my own actions, while testing my individual theories as they applied to the world of business and marketing and global application of such theories and stratus (Boud, 1985).
For example, when looking at the dimension of AC’s international operations I have been able to put my reflective learning strategies to test while applying my observations to the learning and implementing styles, which were taught to us. I was able to perform better at my course through working on my time limits and project durations for the work given to us during the course. This project also me a chance of bringing forward my knowledge of internet based scholarly research which meant getting myself familiarized with the dynamics of relevant and efficient internet research through peer viewed journals available online and utilizing tabular analyses and the use of graphs to observe other artists’ observations of a particular design and then to match and check the same against my own observations. I was also able to develop Boud’s learning framework furthermore in order to be able to a truly reflective and effective learning process based entirely upon the elements of association, integration, validation and appropriation as they arise from the experience of learning during an exercise in creativity. Though these mains I believe I have been able to proceed and excel in the analysis of very small and intricate details of marketing dynamics.
Last but not the least, I have learnt that sometimes there is more to academic research than just chunks of information placed side by side. These bits of information need to be analyzed and made sense of for future business strategy to be formulated as on their own such bits of information can barely make sense. While using these strategies in my teamwork during this project I realized that brainstorming and discussion could make a lot of difference to the intellectual quality of work.
Kotler, P. (1976), Marketing Management, 3rd, Prentice-Hall, Englewood Cliffs, NJ, pp.60.
Kotler, P., Armstrong, G. (1989), Principles of Marketing, 4th, Prentice-Hall, Englewood Cliffs, NJ
Lazer, W., Culley, J.D., Staudt, T. (1973), “The concept of the marketing mix”, in Britt, S.H. (Eds),Marketing Manager′s Handbook, The Dartnell Corporation, Chicago, IL, pp.39-43.
Lazer, W., Kelly, E.K. (1962 ), Managerial Marketing: Perspectives and Viewpoints, Richard D. Irwin, Homewood, IL, .
Doane, Deborah. 2001. Taking Flight: The Rapid Growth of Ethical Consumerism. London: New Economics Foundation.
Haubl, Gerald: A cross-national investigation of the effects of country of origin and brand name on the evaluation of a new car. International Marketing Review, 13(1996), 5, pp. 76- 99.
GB1 (2008) Chocolate Confectionery Industry Insights ‘Future profit opportunities and growth indicators , available through http://www.globalbusinessinsights.com/rbi/content/rbcg0125m.pdf
BBC News (2010) How Awfully Chocolate’s founder went from connoisseur to entrepreneur available at http://www.bbc.co.uk/news/business-11701575
AC (2010) Company Profile available at www.awfullychocolate.com
Mintel (2010) Chocolate Confectionery – UK – April 2010 by the Mintel International Group Ltd
Boud, D., R. Keogh, and D. Walker, Eds. 1985. Reflection: turning experience into learning. London: Kogan Page.
Gibbs, G. 1988. Learning by doing: a guide to teaching and learning methods. London: Further Education Unit.