KRAFT FOODSStrategic Marketing Management

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Toblerone

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Introduction

Kraft Foods

• Type :Public

• Industry :Food

• Founded :Chicago, Illinois (1903)

• Headquarters :Northfield, Illinois, U.S.

• Key people: Irene Rosenfeld(Chairman & CEO)

• Revenue :US$ 49.207 billion (2010)

• Operating income: US$ 5.666 billion (2010)

• Net income :US$ 4.139 billion (2010)

• Total assets :US$ 95.289 billion (2010)

• Total equity: US$ 35.942 billion (2010)

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VisionKraft’s company vision is to lend a helping hand to the people around them to

have a better life and a healthy life-style.

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MissionFor Kraft to remain successful in the long-run, they have to ensure that they constantly re-strategize their products categories to suit the needs of the consumers. Seize the opportunity to exploit its sales capabilities by coming up with different marketing strategies.

• Kraft Foods manufactures and markets packaged food products, including biscuits, confectionery, beverages, cheese, convenient meals and various packaged grocery products

• The Company sells its products to consumers in approximately 170 countries.

• Kraft Foods operates in three segments

• Operations in more than 75 countries and made its products at 223 manufacturing and processing facilities worldwide : December 31, 2010

• portfolio included 11 brands : December 31, 2010

• Acquired the control of Cadbury:2 February 2010

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Overview of Kraft Foods

Brand Expression

Old Logo

• Big & bold

• Colors not attractive

• Customers associate this logo with unhealthy, heavy food.

New Logo

• Lighter and softer

• Different font & color

• Tagline: Make today delicious.

• Red line represent smile.

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Kraft Foods Spain

• Starts in Spain in 1968.

• 10th largest food company in Spain.

• Leaders in the segments of cookies, desserts, candy, nougat and cheese

• Headquarters are in Madrid and Barcelona.

• 6 total factories in Spain, producing cookies beverages snacks etc.

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Chocolate History

• Fifteen hundred years ago in the Central American rain forests. The Cacao Tree was worshipped by the Mayan civilization of Central America and Southern Mexico

• The first chocolate factories opened in Spain

• Chocolate was drinked never used in bar, till 1800 when technology was created.

• 25 billion Euros were spend in European countries on the chocolates in 2010.

• Different taste of chocolate in European countries, varies

• Spain is the difficult market

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Little About Swiss Chocolate• Toblerone is unique in many ways from its manufacturing, recipe, shape, logo and

even licensing.

• Manufactured exclusively in Bern, Switzerland.

• Production center is constantly being updated

• The recipe for Toblerone includes the finest quality cocoa beans, milk, and sugar, honey and almonds.

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Idea Of Triangle chocolate

• Toblerone originates from the chocolatier's family name "Tobler" combined with "torrone", the Italian word for nougat.

• Believed that Theodor Tobler took his inspiration from his mountainous homeland

• According to Theodor’s sons, the Toblerone bar was modeled on some dance steps by dancers in a bar in Paris.

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History Toblerone

• 1867-Jean Tobler opens his first store in Bern

• 1899- opens his own chocolate factory

• 1908-chocolate was named Toblerone.

• 1909-The Toblerone brand was orally registered in Bern.

• 1920-The image of a bear replaces the eagle on the package.

• 1930- The eagle returns this time carrying red flag in the hand.

• 1969- Dark chocolate flavor was available.

• 1973- White chocolate flavor

• 1990- Acquired by Kraft foods

• 1995-1997-Toblerone Minies, Blue Toblerone & Pralinés was available-successful

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The Marketing Environment

The Geographical Market• Biggest company in USA

• Second Largest in world-Nestle

• 97000 employees-2009

• 147000 employees-2010

• Operates in 3 main segments– Kraft North America – Kraft Food Europe– Kraft Foods Developing Market

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Trade Environment

• Trade Relations

• Taxes and Duties

• Labeling Requirements

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Political and Legal Factors

• Spain enjoys political and social stability

• Kraft Foods are not facing any political influences on its business or the political issues

• Change of Govt.

• Prices of milk and other product purchases are influenced by government

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Economical Factors

• Range of economic factors

• Economic growth has been declining

• Significant cost item in chocolate products is cocoa, which is purchased in world markets, and the price of which is affected by the quality and availability of supply and changes in the value of US $ relative to certain other currencies

• Price volatility increased.

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Social and Cultural Factors

• Direct influence

• Codex recommendations.

• Follow good corporate social responsibility practices

• Sustainability

• Fair trade

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Technological Factors

• Rise to new products and market opportunities

• A great impact on the competition

• Greatest technology in Spain

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Approaching Global Markets

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Market Research

• Purpose of research

• 30,000 shopper interviews

• 60,000 passengers observed

• 450,000 questions asked

• Point-of-Sale studies– 25,000 passenger movements observed – 1,800 interviews carried out in North America– Nationalities study: 263 in-depth interviews across 5 nationalities

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Micro-Environment

• Supplier– Determine the optimal relationship– Develop the optimal relationship– Maintaining the optimal relationship

• Consumer

• Competitor

• Employees

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Segmentation

• Five consumer sectors– Snacks : primarily cookies, biscuits chocolates and confectionaries– Beverages : coffee , drinks & powered beverages.– Cheese : natural, processed & cream cheese.– Grocery : spoon able & pourable dressings– Convenient meal : processed meat, frozen pizza, packaged dinner & lunch

combination.

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Geographical Segmentation.

• Kraft Foods North America: highest percentage of convenient meals that is 39.4%

• Kraft Food Europe: highest percentage of snacks that is 31.8%

• Kraft Foods Developing Market: highest percentage of beverages that is 28.8%

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Behavioral Segmentation

• Decision role

• Benefit

• Occasions

• User Status

• Usage rate

• Attitude

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Demographic Segmentation

• Generation

• Income

• Age

• Gender

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Potential Competitors

• Kraft foods compete on the basis of loyalty, quality, brand recognition, brand loyalty, services, marketing , advertisement and price

• The company's principal competitors include PepsiCo (PEP), General Mills (GIS) , and Nestlé SA.

• Competitors’ of Toblerone are Ferrero Rochers by Feraro (origin Italy) , lindit by Lindt & Sprüngli AG(origin Switzerland) and Ghirardelli by The Ghirardelli Chocolate Company (origin US).

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Positioning

• Kraft Foods chose for the first type of positioning prompt namely bringing the quality of its products forward, because building a strong impression creates a strong brand.

• Strong safety and quality system

• TV commercials, advertisements, billboards, websites with video games and more, all of these advertising tools are used by Kraft Foods to promote its brands

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Import & Export

• Prohibit alot of things in Spain during importing

• Tariff system

• Toblerone is being Imported into Spain from Switzerland

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The Marketing Mix

Product

Kraft Foods In Spain

• Cookies: LU, OREO, Prince, Ritz, Mikado, Belvita, Fontaneda, Cracotte.

• Cheese & Grocery: Sottilette, Simmenthal, Royal, Philadelphia, Miraco, Miracle Whip, Elcaserio, Dairylea.

• Chocolate: Cadbury,Toblerone, crème egg, Cote-dor, Falke, Freia,Milka, Marabou, Green & Blacks.

• Café: grand mere, café hag, tassimo, Jacobkenco, Maxwell house, carte noire, gevella.

• Chewing gum: V6, Trindent, halls,bubbalo, the natural, hollyword gum, stimorol, carambar, bassets, maiabar.

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Toblerone

• Toblerone International Products: Toblerone milk chocolate, Toblerone fruit & nuts chocolate, Toblerone dark chocolate, Toblerone white chocolate, Toblerone milk chocolate valentine rose, Toblerone one by one, Toblerone mini purse, Toblerone milk chocolate, holiday multiple pack, Toblerone snow top chocolate, Toblerone fruit and nuts, Toblerone honey comb crispy, Toblerone Pralines , Toblerone Berner Bar.

• Toblerone Available in Spain: Plain milk chocolate & dark chocolate, Toblerone fruit and nuts, Toblerone honey comb crispy, Toblerone Pralines , Toblerone Berner Bar. Toblerone Snow-Capped , Toblerone white chocolate.

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Product Specifications• Features

– Include nougat, almonds & honey– Hidden bear– Suitable for vegetarians– Selection of cocoa beans from different parts of the world’s– Taste and quality is maintained

• Product Variation– Plain milk chocolate & dark chocolate– Snow-Capped – Filled Edition– One by one– Toblerone Pralines – Fruits & nuts– Honeycomb crisp – Berner bar

• Identifying new Product Ideas

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Packaging

• Example of unique branding

• Distinguished by its triangular peaks.

• Toblerone becoming the first chocolate product to be patented.1906.

• Tiny Toblerone has won four Flexible Packaging Association (FPA) awards

• Significant quantities of plastic foil paper and cardboard are used to package the product.

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Product Labeling • Since 2007, provided nutrition labeling on products worldwide

• Nutritional value on the package- depending upon the local regulations.

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Product Warranties• Product expiration date depending on the type of the product

• Toblerone expiration 2 yrs.

Price

• With the cost of getting products onto the shelves rising higher and higher, some suppliers are reducing the size of their wares while maintaining the same retail price.

• Small low-priced packages are the way to give consumers the opportunity to purchase while still maintaining profit margins.

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• Kraft’s pricing strategy that is focused on reducing, discounting and solidifying pricing power in the face of competition from low priced private label.

• Price Penetration

Pricing Strategy

List Prices Of Toblerone

• Dark Toblerone: D. Toblerone Single Bar; Price:$2.69, D. Toblerone 6 Bar: Price:$14.95, D.Toblerone12-Bar; Price:$27.95.

• White Toblerone: W. Toblerone Single Bar; Price:$2.69, W. Toblerone 6 Bar: Price:$14.95, W.Toblerone12-Bar; Price:$27.95.

• Milk Toblerone: M. Toblerone Single Bar; Price:$2.69, M. Toblerone 6 Bar: Price:$14.95, M.Toblerone12-Bar; Price:$27.95.

• Fruit and Nuts & Honeycomb crisp: Single Bar; price $ 2.49.

• Snow capped: Single Bar; price $ 2.49.

• One by One: one triangle 1$

DiscountsToblerone offers a lot of discounted packages

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Placement

• Products are generally sold to supermarket chains, wholesalers, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and other retailer outlets

• Toblerone is available at stores/groceries and mall, supermarkets, coffee shops, airports, movie houses.

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Kraft food working with supply chains• Main Markets of Toblerone:UK, Switzerland, Germany, Spain , France., Italy.

• Customer orders are met and that the product is always available in store

• Sales predictions are constantly reviewed in the light of changing conditions to ensure their accuracy as the year progresses

• KF offer a Tobelle-branded sampling table as well as other Point of sale material such as roll-up banners to ensure strong brand visibility at the point of sale.

• Billboards, TV, rotaries, roll up banners, Magazines etc

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Promotion

Promotional activities

• Toblerone runs ‘Play it, Forward it, Share the Gratitude' mobile campaign

• Toblerone has implemented an aggressive Father’s Day product strategy

• Toblerone held the world “Thank you Day”

• Share & win

• Travel with Toblerone

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Sales Promotion

• Couponing

• Sampling

• Catalogue

• Sponsorship

• Advertising

• Viral marketing

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SWOT• Strength

• Weakness

• Opportunity

• Threats

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Conclusion

Conclusion• Kraft is the second largest producer of consumer food products

• Kraft’s portfolio contains a host of well established brands

• Both developed and undeveloped markets, industry is characterized by intense competition on both price and quality

• Company applies all aspects needed to build a successful brand such as the importance of name and positioning and how to expand its product range.

• Company listens, watches and learns from its customers

• Company communicates with its customers

• By using this 360 degree marketing, Kraft Foods is able to build a perfect media mix.

• Kraft Foods tries to attract media

• Showing its products in cooking programs- gain attention

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Thank You !