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EXECUTIVE SUMMARY

Ferrero UK Ltd is a United Kingdom based company with confectionery products mostly chocolate. They have invested heavily in advertising to enforce brand awareness. The confectionery industry has key players who are a substantial threat to Ferreros well-being and due to the volatility of this industry, Ferrero UK should awake for their moves and learn from their success and mistakes. This will have as result for Ferrero UK of retaining or improving its market share, position and develop customer loyalty. The Marketing Plan (MP) has taken the external and internal environmental factors into consideration, to address the final strategy and its implementation during this festive season Christmas and New Year. Due to the short time available, HS will concentrate on its existing market segments, but for the festive season will target the children and adults. It will emphasize on changing the feature of its product package and the amount of quantities involved.

TABLE OF CONTENTS

COVER PAGE EXECUTIVE SUMMARY TABLE OF CONTENTS 1.0 2.0


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1 2 3 2 2 3 5 7 14 15 16 17 21

INTRODUCTION INDUSTRY MARKETING AUDIT SWOT ANALYSIS MARKETING STRATEGY MARKETING TACTIC IMPLEMENTATION AND CONTROL CONCLUSION APPENDIXES REFERENCES

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INTRODUCTION
This assignments main aim is to protect and retain Ferreros 4th position in the

confectionery market, by increasing the volume sold by capitalising on the Christmas and New Year season (identified as Festive season) impulse buying, to penetrate the market, especially in its key segments of children and 18+years. A Marketing Audit will be implemented including reviews past and anticipated aspects that affect the marketing environment, product positioning and activities of Ferrero UK directly or indirectly, to establish an optimum fit between meeting the stated objectives and its environment in the short-term festive season. It will further discuss approach to be employed, implementation and control before giving a concluding discussion.

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INDUSTRY

CONFECTIONARY MARKET Confectionery is one of the most dynamic and innovative sectors in the UK food industry and it comprises of two main sectors: chocolate confectionery (including countlines, blocks, boxed chocolates and bite-size products) and sugar confectionery (including fruit sweets, mints and chewing gum). The UK confectionery market has grown at an average of +1% per annum over the past 5 years, however within the overall confectionery market different sectors have grown at different rates. Indeed, according to Research & Markets, the UK confectionery market achieved year-on-year growth between 2001 and 2005 to reach a value of 4.53bn. The gum sector, which includes chewing and bubble gums is the fastest growing sector with an average annual growth of +8% between 1998 and 2003. Over the same time period sugar confectionery has grown at around +2% per annum and the largest sector which is chocolate confectionery has only grown at 0.1%. This research has focused on the chocolate confectionery market which accounts for approximately two-thirds of the total confectionery market, being worth close to 3.6 billion pounds out of the total confectionery market worth of nearly 5.4 billion pounds (Euromonitor, 2003). The UK chocolate market is largely consolidated, with a high level of brand recognition. Per capita confectionery consumption in the UK is among the highest in the world, exceeded only by Ireland and Denmark. Chocolate confectionery accounts for around

72.3% of sales value in the UK market, with sales of sweets (sugar confectionery) at around 27.7 % (www. just-food.com). The market continues to be dominated by three major players: Cadbury Trebor Bassett (part of Cadbury Schweppes PLC), Masterfoods (the confectionery division of Mars UK Ltd) and Nestle Rowntree. The best-selling brands are long established and the sector has now all but given up on introducing new brands. Instead, the tendency has been to extend existing brands with new flavours and/or into new product areas, taking advantage of established names by turning them into umbrella brands. For example, during 2005, the celebration of the centenary of the Cadbury Dairy Milk brand offered a strong opportunity for new products and formats for the label. However, Research & Markets said that the UK is unlikely to lose its place as one of the world's major per-capita consumers of confectionery and the outlook for the market remains encouraging (www.confectionerynews.com). The confectionery companies of the UK industry are faced with several factors identified using Porters (1980) five forces framework (Refer Appendix I) COMPETITOR ANALYSIS Competitor analysis is the ability to understand competitors and predict their actions which is vitally important to all marketing orientated organization (Adcock, P, 2001, p.64). Cadbury Trebor Bassett strengthened its leading position as the leading company in chocolate confectionery in 2005, increasing its value share to just fewer than 30%. Most of that increase was derived from its Dairy Milk superbrand launch, which strengthened its position as the leading brand by over one percentage point. The other two leading manufacturers, Masterfoods and Nestl, lost value share in 2003, but managed to maintain their second and third positions respectively. Both companies suffered but particularly Masterfoods from the decline in sales of countlines, with many of their leading brands being among the year's losers: Mars, Marathon, Twix (Masterfoods); KitKat, Aero, Lion (Nestl). Nestl also continued to suffer from poor sales of its Double Cream tablet. Beneath the leading three, other companies saw an increase in value share, most notably Kraft Foods, whose focus on gifting and seasonal products paid off, with a slight increase in value share in 2005, primarily thanks to growth in its Terry's range (Euromonitor, 2005). Ferrero UK holds the 5th place in value retail company share (Refer Appendix II).

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MARKETING AUDIT

EXTERNAL MARKETING ENVIRONMENT Political and Legal Government consumption has been contained in recent years by strict controls on public spending, but is set to rise again as the government strives to improve deficient public services. The rate of overall fixed capital formation in the UK is depressed by the very low level of public investment. The UK is by far the largest petroleum producer and exporter in the EU (which does not include Norway). It also is the largest producer and an important exporter of natural gas in the EU. The government hopes to have 5% of all transport running on biofuels by 2010. Economic environment The economy has been growing faster than the average for the eurozone as a whole for the last nine years. The pace picked up in 2006 after a slowdown the previous year but an abrupt slowdown is forecast for 2008 (Euromonitor, 2005). Unemployment has edged upward. Consumer spending is supported by an increase in employment, but is weakening as a result of problems in the housing market. Consumer borrowing has reached a level roughly equal to annual economic output. Further cuts in interest rates are expected but these may be modest, meaning that the cost of debt servicing could still pose a problem. The deficit was cut in 2006 but remains high by international standards. Labour productivity per hour worked remains lower than in other advanced countries, specifically on average, workers in the UK must work nine hours to produce the same output that Germans achieve in eight and workers in France in seven. Moreover, growth of productivity has also slowed, reflecting a low capital-labour ratio, low efficiency in the use of capital and labour inputs, and a lack of innovation. The UK's public capital is low compared with major economies, especially in continental Europe. The countrys infrastructure is also regarded as decrepit and hinders gains in productivity (Euromonitior, 2005). However, Poulter in The Daily Mail (2007) is optimistic based on Delloites survey on shoppers that expects festive season spending to be per-capita 706 this year, an increase of 7% from last years 662. Understanding the purchasing power through this will direct and

support the decision on target market by acknowledging the underlying concerns (Dickson 2000) Socio-cultural According to Kotler and Keller the Society shapes the beliefs, values and norms that largely define these tastes and preferences. People absorb almost unconsciously, a worldview that defines their relationship to themselves, to others, to organisation, to society, to nature and to the universe. (2006, 87). Based on this premise, the Christmas festivities are part of a long born UK tradition with religious inclination and have gained momentum, which companies promote and capitalise on. The colours commonly used to promote and associated with the festive season are red, gold, silver, glittering and white. Also, there is a spirit of giving such as love, hope, and charity as well as many gifts one of which is chocolate presents. Technological As with most segments of the food and beverage processing sector, technology is an issue that is extremely important to confectionery manufacturers. Most firms are well informed of international developments in processing equipment through industry journals or attendance at trade shows. The vast majority of new technology is available off the shelf, usually from machinery manufacturers in Germany and the U.S. Proprietary process improvements, new product formulations and ingredient improvements occur regularly, especially within larger multinationals. The manufactures (main leaders of the market) of confectionery products can be highly technical, requiring considerable understanding of food technology, including hardware (processing machinery and computers), software and formulation technology. Technical know-how is required to integrate these elements in an effective production system that is efficient and results in a high-quality, innovative product. Artificial sweeteners and natural flavouring systems are fields in which technology advances at a rapid pace. Sugar-free confectionery is one of the fastest-growing market categories. Although still most popular in chewing gum products and mints, the trend is also growing somewhat toward sugar-free hard candies, as well as sugar- and fat-reduced chocolate products. Sugar-free gum now has a majority share of the chewing gum market.

Candies are more difficult to manufacture in sugar-free form because sugar itself is the primary bulking ingredient. Chocolate products, which have both sugar and fat as main ingredients, are also difficult to manufacture in reduced-sugar or reduced-fat form without sacrificing quality and taste. New ingredients are key drivers in the innovation of sugar-free and fat-reduced confectionery formulations. While regulatory approvals for new ingredients can take time to obtain, many ingredients, particularly those for use in the manufacture of sugar-free candies, have been approved and are currently in use. Examples include low-calorie bulking agents, polyol sweeteners and high-intensity sweeteners.

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SWOT ANALYSIS

The SWOT analysis is inclined mostly towards the festive season and has identified strengths and weaknesses of Ferrero UK including threats and opportunities that affect its operations. Strengths
Strong brands, like Ferrero Rocher, Nutella and Kinder Surprise have a significant amount

of trust and loyalty from consumers


A well balanced and wide portfolio, including leading brands across the chocolate,

medicated confectionery
Positioned among the top leading companies(4th largest company) in UK confectionary

market Unique and Innovative Products with high quality Modern technology Weaknesses Not strong New Product Development
Human Resources

Opportunities New product launches

Product offerings Robust organizational changes driving performance Growth in the UK confectionery market. Affordable indulgence Threats

Intensity of strategies used to position product, because competition are picking up

really fast and using similar tactics Seasonal and weather controlled market-giving room for demand for substitutes. Similar competitions growth strategy to Nestle to gain more market share meaning

get them out of the picture by capturing their own.

Substitutes especially hot beverages in the cold season. Intense competition from other leading brands like Cadbury and Nestle Growing Health Concerns

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MARKETING STRATEGY
This section will determine the profile of current targeted market segments and the

characteristics of the festive season. It is essential to find a fit between the two to select a market segment to target in order to achieve the objective during the short festive season (Doyle, 1994). This directs basis for positioning Ferrero UK products and formulating a marketing mix. There are two main things that Ferrero UK wants to achieve through our marketing strategy: increase its sales and increase the number of loyal customers. The UK market for seasonal chocolate confectionary is predicted to be worth 598 million pounds sterling, at 1999 prices, by 2003 as in 1998 it was worth 437 million pounds sterling. Seasonal products accounted for 11.79% of the total sales in the UK chocolate confectionary market during 1998. Manufactures need to constantly find new novelty products. Seasonal chocolate products include items made for special days and festivals, such as Valentine Day and Christmas.

Seasonality and specific events are still important to the confectionery market. Trade research shows that almost 40% of chocolate sales takes place in the first quarter of the year, which itself can be divided into Easter and Spring occasions such as Valentine's and Mother's Days. Around 8% of UK chocolate confectionery is purchased in the two weeks prior to the Easter weekend - and most of that is in the last few days. The Christmas confectionery market - defined as sales of boxed chocolates (bulk and ordinary), novelties and selection packs between September and December - reached 640m in 1998, this was 2.2% up on 1997. A trend towards convenience and less structured mealtimes has been apparent in the UK for a number of years. Factors contributing to these changes included the increasing numbers of working women, longer working hours and shorter lunch breaks, which have all led to a general speeding up of lifestyles and a lower propensity to eat leisurely meals. These factors have led to a demand for food that is ready to eat, and which does not require cooking or preparation at home. This includes snack food, such as savoury snacks, confectionery and biscuits, fast food, take-away food and home meal replacement products. Moreover, the trend towards snacking and eating on the hoof has had an important influence on not only how much confectionery is eaten, but what form it takes, and largely explains why manufacturers have introduced different pack variants and sizes. Busier lifestyles, looser family set-ups and a wider availability of snack products have all contributed to the snacking trend. According to the exclusive consumer research (Euromonitor , 2005) 42% of adults stated they purchased confectionery to eat straightaway when on the move, and 57% of those working full time eat chocolate bars while at work. This consumer research shows that snacking is important within the home, for families and parties. This partly explains the importance of pack formats such as multipacks and minis, vital to the confectionery sales mix of the grocery multiples. Almost half (49%) said they often ate chocolate as a snack when relaxing or entertaining at home, and 41% stated they bought confectionery to keep at home to eat later. Chocolate confectionery accounts for nearly three-quarters of sales by value. Countlines continue to account for the largest share of the sector but boxed assortments are showing the fastest growth. This is being driven by the development of more brands targeting everyday sharing occasions, such as Cadbury Dairy Milk share boxes, which were introduced in 2005. This in turn has stimulated innovation in a slightly more premium tier for more special occasions, which is also helping to add value to the market.
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Target market Using the situational characteristic of purchase attitude, that is dependant on the attitude and mood, such as the festive season, then find a way to influence preference to Ferrero brand. According to Kotler et al (2005) market targeting involves evaluating each market segments attractiveness and selecting one or more segments to enter. An organisation evaluates its strengths relative to the competition and considers how many segments it can serve effectively. The festive season decision-making process is based on impulse and it would suffice to use situational segmentation based on the general characteristics of the festive season, also because Ferrero UK is experienced in short-term similar strategies Children are a major consideration in the confectionery market. According to the consumer research (MIG, 1999), 44% of adults aged 18+ buy most of the chocolate and sweets for the children in their family, and 29% agreed that most of the confectionery they buy is chosen by the children in their family. The festive season is characterised by people caught in the euphoria, of gift giving. Ferrero UK should reward loyalty by targeting the children (4-14 years) and 18+years segments by reinforcing the spirit of Christmas. Food that caters to consumers lack of time for meal preparation and increasing desire to eat on the move helped to drive growth. Hence, the highest growth in per capita consumption during 1998-2003 was seen in areas such as snack bars (133%), noodles (38%), chilled processed food (24%) and ready meals (20%) (see Table 5.1 below). Table 5.1 Consumption of Packaged and Processed Foods by Sector: 2000/2005 Kg per capita Confectionery Bakery products Ice cream (Millilitres per capita) Dairy products Sweet and savoury snacks Snack bars 2000 15.1 67.4 2005 15.7 64.3 % change 2000-2005 3.62 -4.56 13.53 2.24 6.52 133.41

6,133.6 6,963.3 99.1 6.2 0.3 101.3 6.6 0.7

Source: Euromonitor International from trade sources.

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Positioning Ferrero UK position itself as a company that delights its consumers with a seemingly inexhaustible line of unique, high-quality products. In other words our motto is once again making quality confections a part of everyday life for treats as well as gifts. Consequently, our intention for the festive season of Christmas 2008 is to provide to our consumers, adults with a satisfaction of all their deep-rooted emotional relationships with chocolate and children a gift, fun, a treat and available for a restricted amount of time, thereby increasing their desirability. The festive season, brings about change in the consumer attitude and behaviour (Dickson, 2000), thus some product characteristics will be changed like size and the package design and probably introduce new flavours of our existing brands. This helps communicate the desired image that companies want the customer to have of the product to differentiate from the competitions products (Simpson, 2000). Two major influences are shaping the UK market; increasing consumer affluence and heightened awareness of healthy eating. This has seen consumers cutting down on quantity of chocolate while trading up on the experience, based on taste and also the inclusion of nonedible gift components to increase longevity of the gift. So Ferrero UK will emphasize on health, small quantity, taste and package features according to the consumers preferences. Adults and above as well as children at festive seasons are getting together with their family and friends for a meal and sharing gifts. Product The major players of the confectionery market continue to invest heavily both in branding and marketing communications activities each year, while smaller manufacturers and less significant brands rely on product distribution, availability and appropriate pricing for retail sales. It is clear that brand and line extensions are of great significance to the key players in the chocolate confectionery market as all manufacturers seem to be following the same strategy (The Grocer 2003; 47). The key growth drivers of the market are the increasing snacking and grazing culture, together with the availability of and ease of access to confectionery products. In addition to this, with the recent breakdown of formal meals, consumers are increasingly tending to eat a number of smaller snacks during the day rather than three full meals taking a snacking approach to food consumption thereby playing into the hands of confectionary and similar snack-type manufacturers. In addition, in an
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increasingly 'cash-rich time-poor' global society, a growing demand exists for snacks which are easily accessible, easy to buy, store and eat, with an increasing number being eaten 'on the move'. Confectionery sales are on branding due to their reliance on impulse purchasing, particularly within the chocolate confectionery sector even more at Christmas season which is link with chocolate desire. To confectionery manufacturers, retailers and confectionery buyers, pack format has more meaningful implications for determining sales, display and purchasing patterns. By providing different pack formats the trade is keen to ensure they have a broad range of confectionery products to meet every type of consumers' needs. Singles chocolate bars or roll packs of sugar confectionery are the most common pack format followed by standard boxes as Ferrero UK is focus on. They are largely accounted for boxed chocolate assortments, which made modest gains in 1998. Seasonal (tinned or jar confectionery for seasonal occasions, Easter eggs, novelties and selection packs) and snack size formats enjoyed the highest rate of growth in 1998 (MIG,1999). Sales of bagged chocolate selflines have continued to increase, benefiting from some new products, varied pack sizes and the targeting of specific customer segments such as children. Selflines are small items which are all the same which tend to be eaten as informal or casual snacks, often on the move. This is to some extent reflected in the younger age profile of many of these brands: for example Cadbury's Chocolate Buttons is specifically targeted at children. Such brands account for approximately a third of chocolate selfline sales. Price According to MIG (1999) research report Sales of Christmas novelties (eg tree decorations, advent calendars) were up for Christmas 1998 compared to the previous year, due to the larger number of products being available. Selection pack sales however, were down in 1998 compared to Christmas 1997, as people were more cautious about spending their money on these relatively high-priced items. There are significant variations in the confectionery sales mix between individual trading sectors and outlet types. Family sharing products (eg bagged chocolates and sweets 80-250g) accounted for almost a third of confectionery sales through grocery multiples in 1998. Self eat items such as chocolate countlines and sugar confectionery roll packs feature far more prominently in other outlets where impulse, eating on the hoof and snacking are more important determinants of confectionery purchases.

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Ferrero UK will continue to offer it high qualities and innovative products in convenient prices for the consumers. Promotion Promotion Strategy The lead strategy in order to promote our products and services will be primarily to inform our consumers of our special offers and packages and make the right information available to our target customer. This will be accomplished through the use of direct mailing (brochures) and newspaper/magazine advertising, mainly. The ultimate promotion strategy however will be in guaranteeing customer satisfaction since happy customers will generate repeat profits. Brands are particularly dominant within the confectionery market, accounting for over 94% of sales. They continue to benefit from extensive marketing and advertising support (149m above-the-line alone in 1998), and are well-established household names. The major manufacturers have increasingly focused on their key brands, and have not surprisingly, sought to encourage retailers to do the same, by, for example, encouraging multi-facing display of such brands. The importance of brands was confirmed by the 77% of adults surveyed (MIG, 1999) who agreed that they tend to stick to their favourite brands of chocolates and sweets. Ferrero UK intends to utilize a promotional campaign to make its brand products extended lines aware to the market. This will be achieved through the use of several media sources, which will announce our products and in the process will enforce brand awareness. In addition, our company will ensure the ultimate satisfaction of its consumers in order to create loyal consumers who will repeat their purchases and increase sales. Consequently, we will be in the position to approach the largest part of the market and also to take advantage of our good reputation for the generation of more sales. Advertising and Communication Promotional mix is a very useful tool to communicate with existing or potential audiences. Ferrero UK is planning to concentrate its marketing campaigns for its confectionery portfolio in the run up to Christmas, with TV advertising for its major brands. A TV and press ad campaign for Kinder Surprise and Ferrero Rocher will kick off in 1st of November and run through to the end of January, backed by internet activity. Christmas toys

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(like Santa Klaus, angels, trees etc) will join the Kinder range, along with Christmas Balls containing a new range of big construction toys. Seasonal limited edition Snowman, Star and Santa multi-egg packs alongside merchandisers in selected supermarkets to ensure its products are well stocked and visible. Ferrero UK, will also use the relationships it has built over time through sponsorship programmes to endorse or support their initiative through alliances to promote the brands. Markets are constantly changing, so marketing mix has to be flexible to accommodate change without compromising effect of original impact of marketing mix and communication (Simpson, 2000). However, the main objective is immediate purchase. Ferrero UK will use the pull marketing, where it promotes its products directly to the Target market to ensure the right message and how they want it perceived is realised, to influence demand creation, for the consumer to purchase it from the supermarket and sales outlets and push for them to make repeat orders from HS to stock up. This gives HS some semblance of control and power over the immediate purchase and consumption of its product. The strategy adopted is Product Development (See Figure below) using existing product as well as brand and line extension of strong brands in the UK, by using mass marketing with differentiated positioning. Choosing the mass market end of the continuum, to make one product and market that product in the same way to everyone who may want it(Simpson, 2000), but in this case continuing the associations linked to existing segments of children and 24years and above.

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Figure: Ansoff Matrix

Source: Ansoff, I. (1957)

Place Ferrero UK will use the three-dimension distribution approach (Refer Appendix III), where it sells directly to the supermarket, convenient stores, and chocolate stores. It will however concentrate on communicating with new and old consumers to encourage purchase and consumption during the festive season.

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MARKETING TACTICS
Ferrero's has gained in sales the childrens segment has consolidated and expanded.

This is alongside its 24year and above segment. Mass marketing tactics will emphasise children and adults 18+ targets. The promotion will seek to influence sales positively by incorporating weaving together elements of promoting the spirit of Christmas, of giving,

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loving and joy. A thrust of promotion will focus upon near children, with special gifts and toys as well special made for Christmas packages. Ferrero UK has already captured part of this market segment but there are further gains to be made as it is the largest segment targeted. The Christmas messages will focus upon Joy and Happiness for children-oriented products (Kinder Surprise and Kinder Bueno), and for adults-oriented products (Ferrero Roher) the Joy of giving. Key messages for the promotion will be pleasure and fun as well as the pleasure of giving- a treat that is both luxurious and beneficial in the eyes of the customer. The most important marketing goal for Ferrero UK is to gain brand awareness and a sufficient market share through the generation of sales, through the combination of the following: The promotion will include the following actions:
A Christmas story with a key character like dwarf of Santa Claus or with

Rudolf the reindeer on TV or web. Internet Promotion Participation in events like charities or creating a fest with the theme of Christmas. Outdoor advertising (Posters, leaflets) Merchandising Merchandisers will seek to ensure good shelf positioning at eye level adults and for 714 age groups. Shelves will carry the image of the key character of the Christmas Story and this will be repeated on packages. A certain percentage of profits during the festive season will go to the charity of their choice. Merchandisers will be reporting to store and to Ferero UK, in efforts to keep stocks well up in store.

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IMPLEMENTATION AND CONTROL


Ferrero UK marketing plan, should have a control process to outline responsibilities,

objectives and how to achieve, notwithstanding a methodological process to gauge performance and get feedback on effectiveness or deviation from desired strategy to achieve the stated objectives (Kotler and Keller, 2006). A budget and financial forecast for Ferrero, should be in line with the overall business objective, which in this case was unavailable and
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should be enough to support the process. The projected estimated budget for the period begins from 1st of November, 2008 and ends when Christmas sales and activities start picking up to 31st January, 2007. The budget to support this plan is in (Refer Appendix IV). Overall cost for Kinder Surprise, Kinder Bueno, Ferrero Rocher and Nutella is estimated to be 3,000,000.

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CONCLUSION
Doyle (1994) and McDonald (1992) both stress the importance of fitting with the

environment and companys resource capability. Ferroros approach to its market environment, has tried to adapt its resource and characteristics in line with challenges faced in its external environment. Despite having all the research reports, industry and competitors analysis, there are factors that demand, intuition and good judgement to make decisions on what to include in the marketing plan. Although there has been an attempt to match HSs plans with its environment, identifying what the competition is doing and the threats and opportunities, using a benchmark helps set a goal to achieve and helps to work towards. Therefore it would suffice to argue that plans are there so as to get feedback or fall back on as a unifying guide on joint organisational actions, so that deviation or change can be easily detected and managed, against what the organisation intends to achieve. Having looked at varied factors and basing decision on them, it is easier to retrace the origin of decision and know where fault lies and how to rectify or change it.

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APPENDIXES

APPENDIX I The five forces framework in the United Kingdom confectionery market
Threat of potential entrants None! Maturity stage Strong brand recognition by domestic production Highly controlled distribution network

Suppliers Labels Advertising media Transport Fuel Machinery Labour Know-how

Competitive Rivalry None CadburyTrebor Basset Ltd MasterFoods UK Ltd Nestle Uk Ltd Kraft Foods UK Ltd Ferrero UK Ltd Thorton Plc Elizabeth Shaw Ltd

Buyers Supermarkets- Key channel Convenient stores Own stores Boots

Substitutes -Sugar-free, low carbs and functional addedvalue products

Source: Author

Analysis adapted from Porter (1980, 4)

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APPENDIX II VALUE RETAIL COMPANY SHARES OF CHOCOLATE CONFECTIONERY 2001-2003 % retail value Cadbury Trebor Bassett Ltd Masterfoods UK Ltd Nestl UK Ltd Kraft Foods UK Ltd Ferrero UK Ltd Thorntons Plc Elizabeth Shaw Ltd Lindt & Sprngli Ltd Bendicks (Mayfair) Ltd Kinnerton Confectionery Co Ltd Bon Bon Buddies Ltd Green & Blacks Ltd J Sainsbury Plc Tesco Plc Mars UK Ltd Private label Others TOTAL 2001 27.42 21.87 3.64 2.41 1.66 1.13 0.59 0.46 0.61 0.67 0.12 0.24 0.20 24.20 5.00 9.76 100.00 2002 28.42 24.47 21.71 4.06 2.54 1.69 1.14 0.74 0.64 0.64 0.57 0.18 0.25 0.22 4.78 7.94 100.00 2003 28.90 23.93 21.18 4.44 2.52 1.72 1.29 1.06 0.74 0.68 0.60 0.29 0.23 0.18 4.41 7.83 100.00

Source: Trade associations (BCCCA), trade press (Checkout, Convenience Store, The Grocer, Kennedy's Confectionery, mad.co.uk), company research, store checks, trade interviews, Euromonitor International estimates

APPENDIX III Ferreros three dimensional distribution strategy and promotion.

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THREE LEVELS

Ferrero UK

Communication directly to Consumers

Supermarkets Chocolate Stores Convenient stores

Through Advertising TV, outdoor advertising to influence, persuade and have promotions to create demand capitalising on festive season.

Consumer

Source : Author, 2007 Adapted from Doyle (1994, 274),

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APPENDIX IV Ferreros UK projected estimate three month budget for the festive season Sn Details Festive season 1. Advertising 2. 3. TV advertising Packaging-Labels Stickers Outdoor advertising (Posters, leaflets) Internet advertising Events 600,000 300,000 3,000,000 2,100,000

Merchandising (20% of advertising budget) Labour (10% of advertising budget) Total Budget

Source: Author (2008)

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REFERENCES

Adcock, P (2001) (4th Ed.) Marketing Principles and Practice, Published by Pearson Education. Ansoff, I., Strategies for Diversification, Harvard Business Review, 35 (5), Sep-Oct 1957, 113-124 Doyle P., (1994), Marketing management and strategy, Prentice Hall, New York Confectionery 2001-2003 Dickson P. R, (2000) The marketing environment & Social responsibility, In Marketing best practices, The Dryden Press, Fort Worth Kotler P, and Keller K. L (2006), Marketing management, (12 edition), Pearson/Prentice, Harlow Kotler et al, (2005), Principles of marketing, (Fourth European Edition), Pearson/Prentice Hall, Harlow McDonald M. H. B (1992), Strategic marketing planning: A state of the Art review, Marketing intelligence & planning, 1992, 10, 4; ABI/INFORM Global Mintel International Group (1999) Seasonal chocolate confectionary. Market Intelligence Poulter S., (2007), Christmas spree to help lift the gloom, Daily Mail Newspaper, 13/11/2007), UK, pg 22 Simpson P. M (2000), Market Segmentation and target markets, In Marketing best practices, The Dryden Press, Fort Worth Euromonitor (2005) Chocolate Confectionery-United Kingdom. Euromonitor (2003) UK Market for chocolate Confectionery. Trade associations (BCCCA) (2003) Value Retail Company Shares of Chocolate www.confectionerynews.com Anthony Fletche (2007) UK confectionery market outlook 'positive'. Visited at: 10/08/2008 www. just-food.com Visited at: 10/08/2008 www.ferrero.com Visited at: 8/08/2008

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