Chapter 11 - Developing and Managing Products

 Products of Ferrero are unique on the market for over 70 years. Ferrero is family owned company, and they are very traditional. With all it's products, Ferrero rarely changes it's packaging, and it is very unusual to see Ferrero changing ingredients in them. They have a lot of products,which are popular all over the world. It all started when Diovanni Ferrero mixed pure chocolate with hazelnut, getting something that the world had never seen before.

Introduced in 1982, Ferrero Rocher consists of a whole roasted hazelnut encased in a thin wafer shell filled with hazelnut chocolate  and covered in milk chocolate and chopped hazelnut. It is covered in elegant and golden paper, making it look very luxurious. In order to satisfy different taste preference, they have created Ferrero Rond Noir, Ferrero Garden and Raffaelo. Ferrero Rond Noir consists of crisp dark chocolate-covered specialty, with a smooth filling and a dark chocolate and almond center. The different layers creation offers a rich mouth feel, it's the good choice for self indulgence with a unique dark chocolate enjoyment. Ferrero Garden consists of wafer coating with coconut rasps, liquid fondant filling and an almond makes the center of the chocolate. Raffaelo is made of spherical wafer which is filled with a white milk cream and white blanched almonds. It is surrounded by a coconut layer, and it does not contain chocolate.

Tic Tac is also one of Ferrero products worth mentioning. Tic Tac was introduced in 1969, it is a brand of small, hard mints. It is available in variety of flavors. Besides the original ''Orange''and Fresh mint flavor, several new varieties were added including: aniseed, cinnamon (or ''Winter Warmer''), an orange and grape mix ( in 1976), spearmint, peppermint, Powemint, sour apple, madarin, tangerine, berry, fresh orange, strawberry, wintergreen (in 2010), mango, and lime.

Kinder is a product line of Ferrero that took a large share of markets all over the world. Kinder product line consists Kinder Chocolate, Kinder Bueno, Kinder Country, Kinder Delice, Kinder Maxi, Kinder Pinquin, Kinder Fetta al Latte and Kinder Suprise.

Nutella was created in a backroom of the pastry shop in Italy in 1944. Since then it still one of the most famous food specialties  in the world. It is a chocolate and hazelnut spread, and it is still packaged in glass jar. In order to satisfy it's customers, Ferrero created different sizes and packages in which Nutella is served.

Chapter 8 - Segmenting and Targeting Markets

Ferrero uses many different market targeting and segmentation tactics. In order to sell their products around the world, with so many different cultures, they need to use geographic segmentation, and they use it very effectively. The way they do it is that they hire local marketing agency to sell their product, because locals know the best way to sell a product to their fellow neighbors. Ferrero acquired a decent market share in Europe, South America, North America and Australia. Their next target market is Asia, and they already started promoting  their products there. Also, Asia is a huge market and is very populated, by acquiring it they would generate unimaginable sales.

Marketing Segmentation strategy that Ferrero uses is certainly demographic segmentation. Their products are usually promoted to different age groups. Kinder Eggs to children, Kinder Bueno to teens, Nutella for the whole family and Ferrero for adults. In addition to that, they demonstrate effective psychographic  segmentation, by promoting some of their products in an elegant and classy environment.

Chapter 15 - Marketing Communications

In order to describe Marketing Communications of Ferrero, I will describe my story when I encountered some of their products. First of four AIDA concept is attention. . Coming out of Socialist Yugoslavia, which was relatively closed to the global market, with it's own products and industry, which were relatively good, but far  from what world had to offer. I remember when i first encountered with Ferrero Eggs. It was 1998, I saw this commercial on TV, and it got my attention, because I saw a kid opening something that looked like an egg wrapped up in white and red paper. As soon as he opened it I saw chocolate, I was stunned, I never loved eggs but I loved chocolate, and my mother always got angry because I didn't want to eat eggs, and I thought I might eat chocolate egg. I was really interested, and I had a great desire to taste it. On the first day after school I asked my mother to buy me one of those eggs and guess, she did. But there was a part that they didn't show on commercial, nobody told me about the toy inside the Kinder Egg, imagine my happiness when I saw that. I was immediately in love with Kinder Eggs, me and all kids around me.

Ferrero's commercials are designed to get our attention, always showing beautiful chocolate, melted in a way that chocolate in that moment looks very desirable. I don't think many people can watch those commercials and not think about eating chocolate at that moment. Also, their way of packaging their products is unique, especially Ferrero Rocher with it's golden and very elegant style.

Chapter 10 - Product Concepts

Products of Ferrero are primary convenience products, relatively inexpensive items that  merits little shopping effort. Ferrero has several completely unique product lines, some of them, upon their arrival created new categories in chocolate industry. As I mentioned, there is no need for extensive search to buy products of Ferrero, they are available almost on every corner, although, they are more seen in Europe than in the United States.

Ferrero always offers high-end quality products, with elegant packaging to go with the delightful taste. Also, some of their product lines, most notably Kinder, rarely changes it's packaging. In 1950's they have created packaging for Kinder, with a picture of a kid on it, because Kinder means kid on German. Now, kid that is still on Kinder is around 60 years old. Most important thing about Ferrero's products is a brand. They have created a brand out of each product, and customers see that and return to Ferrero's products occasionally. It is hard to imagine childhood without Kinder Eggs, middle school without Kinder Bueno, and holidays without Ferrero Rocher.

Chapter 17 - Personal Selling and Sales Promotion

Personal Selling is the first kind of selling that we know of, and is probably the most important. However, Ferrero is not doing a lot of it, I think it is because they usually don't have any contact with ending consumer. There is only a few Ferrero stores, as I previously mentioned, they are usually located at the airports. Also, that is not a coincidence, because their products are often used as gifts to family, friends or loved ones. Ferrero stores are elegant, modern and golden, with amazing staff that is there to guide and help you to make your decision. Gold is color that represents Ferrero company.

I think their Personal Selling is unseen to customers, mainly because it is between Ferrero and stores that sell Ferrero's products. They always try to keep an excellent relationship with store owners, by  ensuring that delivery of goods  is performed as promised, and that all products are high quality. Unfortunately, they can not influence consumer decision with personal selling, and for sure they can not rely on independent store owners to sell their products. That is way they are making sure  to bring high quality and tasty products on the market, advertise them smart and then sell them.

Chapter 16 - Advertising, Public Relations, and Sales promotion.

Today, it is hard for an ordinary person not to spend one day without looking at some billboard, magazine or TV advertisements. If you can spend a day without looking at it, you can probably hear it, most probably on the radio and internet. For an marketer, it is really hard to get someone's attention these days, and Ferrero certainly does that. Ferrero does business with some of the greatest media companies in the world. As of January 1st 2013, Ferrero hired Omnicom Media Group to do advertisements  in markets including U.S., the U.K., Australia and Russia. Ferrero has also worked with several media agencies and holding companies  around the world, including Dentsu's Aegis, Publicis Groupe's ZinthOptimedia and  WPP's GroupMand.

It is strange to see a commercial promoting Ferrero company, or all of their products at the same time. It would be more like this, you would see advertisements for Ferrero Rocher, Nutella, Kinder, always separate. Their advertisements are 90% family oriented,some of them show elegant, luxury lifestyle that would be boring without Ferrero Rocher.

They have been included in a Top 100 Brands by Media Spending in 2014, number was close to 1.17 billion U.S. dollars. Their advertisements are usually before holidays, especially before  Christmas, because customers are more likely to buy Ferrero's products at that time. Numbers also confirm this statement, almost 40%

of their sales are during holiday season.

In addition, I would like that to add that Ferrero's products promote themselves in a weird way. Company is from Italy, but names of their products are gathered from many languages. Kinder - means kid on German, Rocher - means rock on French, Bueno - means good on Spanish.

Chapter 14 - Marketing Channels and Retailing

Ferrero's success is based primarily on the success of different brands developed by the group. But, to maintain this level of excellence, Ferrero must anticipate any change and adapt as soon as possible. This involves the establishment of a supply chain is performing particularly well.

With all its products, Ferrero uses the normal distribution channels for small, medium and large retailers. Ferrero uses short distribution channels, 1 or 2 intermediate before end user, allowing an increase in awareness and geographic implementation locations.

Ferrero's products can be found in almost every drugstores, convenience stores and discount stores all over the world. In addition to that, Ferrero has small kiosk's at airports around the world, where you can find all their products for fair price, usually cheaper than at other places. 

This choice of circuit is essentially due to the large size of Ferrero as well as its relocation. Its leading position gives it a certain assurance of profitability and its distribution is assured by its experience.