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Ferrero Rocher is the one of the multinational corporation in the world via the product: Ferrero Rocher that is kind of the chocolate and the it has a luxury perception to the customer who have some of reason that are price, packaging, and etc. As it is a FMCG (Fast Move Corporation Goods) in Malaysia, its sale portion has not been attracted in consumers’ behavior in purchasing consideration. Duo to of shown problems, Ferrero Rocher has changed as a newness or innovative snack that will be strong competitive food in eating habit whereby, the conscious or prospective consumers can select Ferrero Rocher.
From the beginning to the end in its own implementation, Ferrero Rocher is able to be more attractive goods with the renewal image to the people and then the company will be successful by the enjoying the great revenue in food channel as well. Ferrero Rocher chocolate will be distributed by the renovation about most concepts and powerful diffusion in terms of the brand itself over the world.
Ferrero Rocher is a own brand name with a family history: Michele Ferrero is the founder and the leader in the corporation with his relatives who have contributed to the success in the food industry in Italy. Ferrero Rocher is one of the famous chocolatier food firms internationally, since it was opened in Italy by Ferrero SpA since 1982. Ferrero Rocher has his own name as a brand and it has been producing many types of chocolates with different flavors; as well as diversified chocolates have been made by the company for strategic reasons.
For example, the main components of the chocolate is based in roasted hazelnut frame into the thin wafer by consolidation with hazelnut cream, milk chocolate and hazelnuts.
Each of the products: Ferrero Rocher has a special covering that is uniquely shaped with a gold-coloured packaging that states the ingredients with the 73 calories. The firm has been performing well all-over the world with strong distributions. It is involved in many social activities and responsibilities: like giving donations, environmental reflection, and moral concern. Ferrero Rocher has its missions that are: high quality value with good ingredients and freshness into all its products. Moreover, the company tries its best in communicating with the customers and maintaining their loyalty. In global food administration of Ferrero Rocher, its performance, and launching is regarded as weaker in Malaysia than in other countries (Ferrero.com, 2009)
There is PEST (Political, Economic, Social, and Technology) analysis about Ferrero Rocher in Malaysia. It is critical to analyze the sectors like Political, Economic, Social, and Technology in order to be more visible to trace the factors for success. The following theories have been taken as Ferrero Rocher’s performance in Malaysia.
Ferrero Rocher Chocolate is an imported product by an Italian company that is Ferrero SpA and then there are legalities in trading business by Malaysia between Malaysia and Italy. The purpose is to protect the local food industries: controlling all imported goods so as to benefit the Malaysian businesses. Any new type of imported snack, like those of chocolate origin, introduced in Malaysia will have a negative impact on the local market, thus a need for legal controls. Ferrero Rocher will also have to submit to these laws. In other words, the imported goods are monitored so as to ensure quantity, quality, and fairness.
The main purpose of the law is to benefit both countries: Malaysia & Italy and in the process benefiting Ferrero Rocher’ chocolate in Malaysia. In addition to that, religion is another political factor to be considered by Ferrero Rocher. For instance, the Halal logo on the cover or package gives assurance to the Muslim consumers that Ferrero Rocher is consumable by them without prejudice. Presently healthcare is considered to be another political factor, especially its negative effects like weight gain, tooth decay relating to chocolate. Thus the Malaysian government is monitoring the quality of these foods, including Ferrero Rocher (Ferrero.com, 2009).
The objective of all business is to maximize profits by minimizing the costs, thus the need for sophisticated machineries, efficient labour, low rental etc. Taxation and interest rates are an important component of costs, and they are indispensable. The economic growth factor is important to price fixing and to manage the administrative costs. The income level of the majority of the consumers will be considered for the marketing strategy to promote this chocolate as an affordable and proper snack in Malaysia. In term of employment Ferrero Rocher employs a lot of Malaysians and also use a lot of the land for establishing their factory thus enabling better utilization of the domestic resources. This will contribute towards improving the Gross Domestic Product of the country. World Economic condition will be matter of B to B like exchange rate between the two countries. Since the economic growth and the exchange rate of both the countries are different, the company has to price the chocolates in Malaysia that is beneficial to the company and the counties concerned (Ferrero.com, 2009).
Malaysian’s eating habits vary between the different races, cultures and beliefs. The purchase of snacks varies with the flavors, as well as the retail outlets: food court, supermarket, convenient stores etc. Ferrero Rocher’s products offer high quality in luxurious designs: value for money. Religion, an important factor to be considered. The Muslims are very concern about ‘halal’ labels; as it gives them assurance that the food is fit to be consumed without religious prejudice. Ferrero Rocher need to consider this matter. Health is also another issue in Malaysia where weight and dental decay is a concern especially the consumption of chocolate products. Therefore Ferrero Rocher need to be cautious about this too. Damage to environment by the disposal of waste material is also a concern of the government. Ferrerp Ropcher need to wrap and package the chocolates in reusable boxes that are not usually disposed of after the chocolate has been consumed. This will help protect the environment (Ferrero.com, 2009).
As it is an international product, many factories have been established in Malaysia. It is the beneficial property for Malaysia because variety of snacks can be produced appears in larger areas in Malaysia. However, it needs expects to make or manage all processing in working place. Worldwide distribution will have need of local workforce to make & manage for localization their business. Moreover, skilled employees increase and other technology can be improved by handing down the techniques by transmission from Italy to Malaysia (Ferrero.com, 2009)
Ferrero Rocher’s chocolate is advertised and demonstrated as a high quality product and it has also been considered the perception of the consumers. It has also been characterized to have it own uniqueness in the market. It is made in Italy’s technology and by hand by their local work-force in Malaysia. The chocolate has been considered to be totally different as perceived by the consumers. It has also made a contribution to the list of chocolates in the market, creating more choices for the consumers.
There are some stringent rules to adhere in Malaysia as it is an imported food item from Italy. The price is on the high side and it is supported by the quality image: the gold packing. The ‘high’ image and the high price may not encourage the average income consumer to consider Ferrero Rocher. The price makes a big proportion of their disposable income and that is a discouraging point to consider.
Ferrero Rocher attracts new consumers via their new and tasty flavors that is considered a specialty. As a result the potential consumers who want new and unique tastes would consider this chocolate: a change in consumers’ tastes is noted in Malaysia, and that is an opportunity that Ferrero Rocher should consider for it expansion program in the future in Malaysia.
In Malaysia the standard of living is not uniform, hence there are rich and poor people. The low and middle income group does not habitually eat chocolates. The parents who are concerned about their children’s eating, especially food that put on weight, may distract the children to other snacks. Ferrero Rocher has been facing much competition in channeling their chocolate in the local and international market. [Appendix 1]
Ferrero Rocher’s chocolate products considered as a dainty snack has many competition from companies like , Hershey, Toblerone and Cadburys. The competition is with Cadbury’s new chocolate called Dairy Milk; and Cadbury is also a large multinational company, having factories in France, Poland, UK etc. They offer many types of food, like Bars, Cakes& Biscuits and Boxes, Bag& Tin, Drinks, and Ice cream & Desserts. Cadbury focuses on internal plan, more nutrition chocolate, and many diversified products, in order to achieve profits and to survive in a competitive market. Toblerone is also an international company that has chocolate bar including Nugget, Almonds, and Honey, and is a competitor to Ferrero Rocher. It is following Schott's Food & Drink Miscellany: standard method in food and fusion in merging different sort of food.
The company’s strengths are the design on the cover that appears to portray a standard in size, components and that it is inexpensive. The point to note is that Ferrero Rocher has many competitors and a weak distribution channel. The products like Dove, Milo and Whole Roast Almond are considered as prospective chocolates flooding the market. Dove is a new brand offered by Mars Company. They have come with caramel, chocolate bar and cookies as their main products, but they lack market awareness. Milo, another brand created by Nestle, who is also a multinational. It offers drinks, breakfast cereals, chocolate bar etc. The Whole Roast Almond owned by family business with a ‘Dutch Press’ and uses alkaline salt to enhance the quality of their chocolates, but they have a weak food channel and distribution methods.[Appendix 2 ]
There are many types of snacks with chocolate flavor , in the food industry: Ferrero Rocher chocolate, Dairy Milk and Hershey. These are international brands that are easily available in Malaysia and are received well by the Malaysians. There is plenty of choice for the consumers.
The Ferrero Rocher chocolate consumers are divided into Gender, Age, Lifestyle and Income groups. The female population has a higher tendency to buy Ferrero Rocher as the chocolate is wrapped in gold and has a soft crunch inside. The young population who is made up of 13.7% between the age of 15-19 and 13.1% between the age of 20-24, in 2011, are exploring new tastes and seem to prefer Ferrero Rocher as they are developing a habit for sweet food. As for the income group the skilled and the high income group can afford to purchase Ferrero Rocher since they have a high spending power.The skilled and semi skilled people shows that 25% are the potential consumers of this chocolate.
There are two marketing strategies to improve its sale’s position and this has to consider both the consumer & Ferrero Rocher Company. First it has to reposition the image of the products perception by the potential consumers; who are assuming that the chocolate is not for the normal income group. Effective communication should help win the consumers heart and to hold their loyalty. The price is another strategy that the company need to consider. They need to consider the costs relating to processing procedures, and this could divert the potential consumers from other competitive brands and put Ferrero Rocher as the leader in the food channel (Ferrero.com, 2009). [Appendix 3]
There are some ways to segment all people by categorizing them by their common 8nterests or features. As referred to in the Appendix. The Malaysians can be separated into three main groups: the Malay who make up 50.4%, Chinese 23.7%, indigenous 11%, while the Indians make up 7.1% and other 7.8%, with the total population of 28.7 million. Since the Malays make up the majority in the market , therefore the focus has to be on them. They are the strategic group. Besides that the age is also a factor for segmentation. Those in the age group of 15 to 24 years make up of more than 50% of the total population. They can also be catogarise into income group: high income group, meddle income group and low income group. Another way to classify is by profession , that is the student, the skilled, the semi-skilled and the professionals. The young, the high and middle income group, the skilled, and semi-skilled, and the students are the population who would be able and willing to buy Ferrero Rocher.
The process of segmentation of the population is important to target and to implement the right approach to get the group to buy Ferrero Rocher .The segmentation helps to differentiate Ferrero Rocher from the other brands of chocolates, in relation to the quality and the benefits that can be derived from these chocolates. It will also enable the company to target the sales strategies in a way to get the consumers to buy their chocolate or shift away from other brands to Ferrero Rocher as satisfaction from the snack can be assured.
Currently Ferrero Rocher has been netting a sales of 6.6 billion Euros and achieving more than 4.3 percentage of net sale growth as compare to previous year. The group employs more than 20000 employees and is investing 383 million Euros; to increasing its capacity. The investment is about 5% of the net sales figures. The Group is constantly investing in innovation, research, and development and has, in particular, recently been focusing on energy-efficient installations in its plants. The financial objectives are divided into two: to increase its capacity and to consolidate its investments and it may be equated to 13% of the net sales in 2013 (Ferrero.com, 2009).
To increase the value of the chocolates to the consumers an effective plan is required. Therefore the pricing according to the packaging is crucial. For example the 16 pieces pack is RM 16.88 and that is about RM 1.06 per piece, while the 24 pieces pack is RM29.88 and it is about RM 1.25 per piece. ‘Penetration price strategy’ can be used as a new plan to capture the market. If the price can be decreased from RM16.88 to RM15.88 for the 16 pieces pack can be affordable by the consumers, although this might be followed by a price war. Price is the strongest reason that motivates consumers and as an example, the discounted price has been successful in attracting customers in Starbuck, in Malaysia.
In addition, the way the chocolates are supplied to the customers is by avoiding the intermediaries like the wholesaler, retailer, brokers etc. This approach will help minimize the costs, from the upstream to the downstream. This will enable the company to save costs and that means more profits can be earned. The one external channel is the retailers who will be responsible to help deliver the chocolates to the customers. The customers can get the chocolates directly from these outlets. 2. Marketing
As a cognitive major issue is the “customers” in the marketing strategy: the strategy is to be fit the consumers in terms of quality: represented by presentation, freshness, health factors etc and these are important to get customers’ loyalty. The company could display more of its chocolate on the shelves of the urban stores. This could lure the customers towards Ferrero Rocher. They could also concentrate on the strength of product improvement like releasing new and less caloric chocolates , by the end of 2012( Ferrero.com, 2009).
Ferrero Rocher can create many flavors of chocolates and in many combinations: with real fruits. When the chocolate is bitten one can get the crunchy sound while the inside is soft. The fruits give a sensational feeling to the customers. These varieties of tastes should entice the costumers to shift to Ferrero Rocher and consider it to be their favorite choice.
There are two large hyper markets in Malaysia : the TESCO & JUSCO. They display the chocolates, over the years , in 32 outlets ( as for TESCO) and 21 outlets( as for JUSCO). It is also displayed in the local college like TAYLOR’s and INTI in their cafeteria to cater for the students, and that has enhanced sales. The chocolates have also been launched in some of the famous café like Starbuck in Malaysia, which has more than 150 outlets (Starbuck.com. 2009)
On the packaging, to attract the customers a mascot has been created as an additional personality , on the surface of the chocolates. This especially focused to attract the children who strongly patronize the chocolates. This will also sustain it luxury outlook and develop consumer’s loyalty.
Ferrero Rocher approaches its customer in many ways, and they take advantage by promoting the chocolates during the Valentine’s Day and Christmas Day. It is very sensible to sell them during these occasions as the consumers will be seeking something of the best for themselves or to be given as gifts. Thus aggressive advertisement during these periods is crucial (Mooney L., 1997)
Creating a romantic story with Ferrero Rocher has also created success as it is a strong promotional tool. For example the proposal by a man to a lady , with Ferrero Rocher , makes it seem like a fairy tale that the people want to imitate. The chocolate has also been used as a bouquet in weddings, and that will bring happiness to the bride. This story has created a new culture and that is good for the business, and these actions have benefited both the Corporation and the consumers (NAIR V, 2012)
The company is also concern about the “Green Business”, and this is done by accommodating the recycling of the cover paper or waste and to open ,more factories to recycle . By 2012 it intends to increase recycling by 30%. They intend to reduce spending on water by 30% and also reduce the CO2 emitted into the environment (Ferrero.com, 2009).
The company has also been concerned about the environment. It uses recycled papers in their business. They are going green. This has earned them a conducive relationship with the government. This action of using recycled papers has help reduce their expenses. (HUONG T, 2011)
An event with the Ferrero Rocher is another types of social promotional issue that is highlighted to the many of consumers about the products in particular situation. Likewise, some contests has also similar objective by the strong supporters or sponsorships. For example, an award to the winner will be advertising automatically Ferrero Rocher. In other word, the company offer social activities that make the consumers to enjoy with the products.
It is important that the employees have a good education and knowledge. This will help them to be efficient in their work, and that would benefit the company. They will also understand the prime objective of the company: the advantage and disadvantages relating to health, quality of the product, the industry, the information relating to transport, the brand promotions and also communications will be effective. All this will enhance a healthy relationship between the staff and the company.
In 50 billion budgeting in 2011, the capital is allocated into the some categories that have contained its own way to be attractive snack to the customers. It is to make a positive possible situation in their market and it plans by the 2013. Ferrero Rocher is able to upgrade with the evaluation in the given table:
New characteristic Ferrero Rocher has been released in food industry via various Medias like Television, Newspaper, and etc. As referring to the Gantt chart Appendix4, the product has been well known but it need to be governed by the people who have its responsibility or qualified employers at working place. In 2012 or the future, any of concerns must be take care of itself by the experts or the professionals in order to investigate all of processing for predict and prevent if there mistaken goods or poor quality of a products. [Appendix4]
Ferrero Rocher is able to get rid of its difficulties via these valid basement plan & action as a control. 13% of net sale can be shown in proper implementation that should be performed consistently as well. In outstanding of its aspects, all of properties will be given such as a great profits or margin.
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