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.

Chapter 6 - Consumer Decision Making

Products of Ferrero are very tasty, one reason why they are so popular with children.On exemple, Ferrero Joy has something that every kid wants - chocolate and one toy inside. First you need to go through chocolate to get to the toy. In USA Kinder Egg us prohibited, even if death case never happened. People speculate that some U.S. manufacturers  of chocolate lobbied against Ferrero Eggs to get their products sold, which turned very promising for them.

Another very popular product of Ferrero is Kinder Bueno. Kinder Bueno is often marketed to teens and young people ,as the product after you finish with kinder eggs. It is also very successful  in reaching teens, as a snack during the day.

As children grow up and they become adults, with the same love and trust toward's Ferrero's products, they turn their eyes to Ferrero Roche. Ferrero Roche is often promoted as an elegant, classy and golden chocolate product, with unique blend of chocolate and heselnut.

Last but not least, is Nutella and the rest of Ferrero's products. Nutella is made for everybody. It's the most popular chocolate spread in the world. Confirmation of that are Nutella's sales. Often promoted as a meal, in which the whole family can enjoy.

It would be very unfair not to credit all other Ferrero's products,some of them are old to children, ome to teens and some to adults.

Chapter 5 - Developing a Global Vision

 At first, company started in Italy, after that they started selling to Germany, and there they bought Kinder, rising it up to completely another level. After World War II they opened offices and production sites abroad, and Nutella eventually became world's leading chocolate-nut spread. Ferrero is the world largest consumer of  heselnuts, buying up to 25% of global production in 2014.  As the years passed by they slowly become bigger. Today, Ferrero is the company operating on every continent on this planet. They have around 30,000 thousand employees,turnover is close to 10 billion U.S dollars.  Here is a global chart just for Nutella.

As almost every internacional company, Ferrero's marketing strategy is different in every country. Because of that they have created more companies, and all of them are under Ferrero. But they operate as independent companies, making their own decisions and  building their own marketing strategies.

Chapter 4 - Marketing Environment

From the day they opened Ferrero decided to be the company affordable to everyone. They have a big product selection,some expensive and some of them very affordable. If you need to put an accent on somebody, then their main target would be children.

Ferrero is smart about marketing to children, and not just for the short term period, but also they are focusing on implementing some kind of tradition to kid's  life so they can continue to use Ferrero's products when they grow up, and then the real money comes in.

Beside just marketing to children Ferrero uses Ferrero Rocher as an elegant,classy,refined and golden chocolate product. Ferrero Rocher is primarily advertised as an upper class chocolate, to fit some kind of lifestyle that people live, or would like to live. It's also a little bit pricey for common people.

Ferrero is making almost 40% of their profits on holiday season. Their products are marketed as an perfect gift for everybody, no matter the age, color or lifestyle.That is also way you will see more of Ferrero's commercials before holiday season.

Chapter 18- Social Media and Marketing

Ferrero started engaging in social media about 5 years ago. They have many social media accounts. For every product they have, they have created separate social media account. They are focusing on promoting their products, and also updating and improving their existing products based on feedback's of their customers.

Communication Department is mainly responsible for answering to those feedback's, beside them almost every employee in the company has the ability to do the exact same thing. Their presence on Facebook,Instagram and the rest of social media websites gives them great opportunity to promote and market their products to new customers.

Diovanni Ferrero sad that social media will play a huge part in their marketing strategy in the future,and that social media budget will constantly rise over time.

Chapter 2- Strategic Planning for Competitive Advantage

As of 2015 Ferrero is the third largest chocolate producer in the world, with net sales reaching 10,911 million U.S. dollars. You probably wonder how they do such a great job in selling chocolate .

Ferrero has a long history, it was founded in 1946, next year will be 70 years of it's existence. From the first day until now it's family owned company. That is one of the main reasons why Ferrero is so big. They have product differentiation and sustainable competitive advantage.

Ferrero's product differentiation is close to magnificent. They make products like Nutella, Ferrero Roche, Kinder and Tic-Tac. All of those products were completely unique when they first entered the market, some of those even invented new categories in chocolate business. All of those products rarely change packaging or ingredients, Ferrero is very traditionally oriented company and they like to make a good products and make a brand out of each one of them.

Also, their sustainable competitive advantage is that they are one of five most secretive companies in the world. Their way of making their product is hardly known to anyone. Ferrero has a team of engineers  that design and build their own machines for producing chocolate.

CEO of the Company Giovanni Ferrero sad: “Today, the group’s main objective is to expand internationally, by establishing its products globally,” added Ferrero, saying that the company’s growth strategy will be based on brand development, innovation and markets outside Europe.

Chapter 1- Overview of Marketing ( Brief History and Mission Statement)

Mission Statement

High quality, crafted precision, product freshness, careful selection of the finest raw materials, respect and consideration for our customers: these are Ferrero’s “key words” and values which have helped make its confectionery well-known and loved by millions of consumers all over the world. Its products are the result of innovative ideas, and are therefore often inimitable, despite being widely distributed, and have become part of the collective memory and customs of many countries, where they are often considered true cultural icons.

Ferrero also means caring about hygiene, the environment, social issues and the local communities where the company is present, as well as its own human resources.
Today many Ferrero products are “global”, in that they are sold everywhere. Ferrero is one of the largest confectionery groups in the world.

However Ferrero’s distinguishing characteristic is that it is “glocal” (think globally, act locally), a company which is both global and local, which focuses on international development, without losing sight of its relationship with local communities.

The consumer is always at the centre of our strategy. Ferrero’s relationship with its consumers is based on longstanding and mutual trust, built up over the years with expertise, experience, understanding and intuition. This is a measure of Ferrero’s interest in consumer needs, and this is a key factor of the company’s success.

About Ferrero, 
 
Ferrero is an Italian manufacturer of branded chocolate and confectionery products and it is the third biggest chocolate producer in the world. It was founded in 1946 in Alba, Piedmont, Italy by Pietro Ferrero.
 
The Story of a family 

  The great leader of the Group’s development is Michele Ferrero. With the desire to make and create new products with state-of-the-art ideas, he has revolutionised the food habits of millions of consumers.Thanks to his consistent and efficient partnership with his wife Maria Franca, he was the first Italian manufacturer after World War II to open production sites and offices abroad in the confectionary sector, turning the Company into a truly international Group.We have to return to the ‘40s to discover the roots of this success. These were the years when Piera and Pietro, Michele’s parents, transformed a pastry shop into a factory.These first and decisive steps forward were thanks to the products “invented” by Pietro Ferrero and his son Michele, who was then very young. Another key to success was the effective sales network organised by Giovanni, Pietro’s brother, who died in 1949.And now Ferrero’s story has reached the third generation. Pietro and Giovanni Ferrero, sons of Michele and Maria Franca, worked together at the top of the Group as Managing Directors for more than 10 years. In April 2011, Pietro Ferrero tragically died in South Africa while working on a humanitarian mission, inspired and driven by him, that aimed to relaunch the Ferrero Social Enterprises.Today, Giovanni Ferrero continues to run the Company successfully, aiming to reach even more ambitious goals and ensuring that the company inspiration and motivation that was so strongly shared with his parents and his brother. Today, just as yesterday, it is a structure based on solid family values.In short, behind the trademark, the turnover and the expansion of a multinational company, there is the story of a brilliant and strong-willed Piedmontese family that gathers its extraordinary strength for growth from the Ferrero Foundation’s motto: “Work Create Donate”.