Thornton's Marketing Strategy: A PESTLE and SWOT Analysis

This paper analyzes Thornton's marketing strategy using PESTLE and SWOT analysis. It examines the company's strengths, weaknesses, opportunities, and threats in the chocolate industry. The paper also compares Thornton's marketing mix with that of Cadbury, highlighting key differences and providing recommendations for Thornton to improve its market position.

BUSINESS MARKETING ESSENTIALS
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Table of Contents
Introduction.................................................................................................................................................3
Overview.....................................................................................................................................................4
Strategic Direction of the Company.............................................................................................................4
PESTLE Analysis of Chocolate Industry........................................................................................................6
Technology..................................................................................................................................................7
SWOT Analysis – Thornton Vs Competitor..................................................................................................7
Table SWOT Analysis...................................................................................................................................8
Recommendations.......................................................................................................................................9
Task 2........................................................................................................................................................11
Conclusion.................................................................................................................................................14
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Introduction
In the presently changing world dynamics, organizations are facing challenges to realign their
marketing strategies to grow on their profitability. On similar lines it is required for Thornton to
support the goals and objectives for the Organization and enable a Marketing Plan based on
external and internal strength and weaknesses. The selection of Pestle and SWOT analysis has
been enabled to design a strategic planning for the organization. The paper is providing an
understanding of planning for a considerable growth in the critical market condition.
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Overview
Founded in 1911 in Sheffield, UK, Thornton has been a Market leader in Chocolate segment and
forayed in to new sectors like biscuits, ice-cream and cafes. The Company has a big effect on
Seasonal sales contributing to 13 % global Sales during holidays. As per the latest business figures
the Revenue of the Company for FY 16 was 222.4 Million GBP and the Profits for the same fiscal
was 7.5 Million GBP (Thornton’s, n.d.).
Strategic Direction of the Company
 Aims to increase the Market Share.
 To market chocolate as a gift.
 Reduce Number of loss making stores. The company has reduced already 296 stores in
2013 to 247 stores in 2015
 Aims to Sell to the Super Market group and Wholesalers (Rigby, 2015)
Competitor Market & Present-Day Industry Scenario
 Thornton faces competition from big chocolate brands like Cadburys, as well as luxury
brands such as Lindt, Hotel chocolat.
 Hotel chocolat established in 1988 reaped a profit of 8.3 Million GBP in FY14 whereas
Thornton raised a profit of 6.6 Million GBP in the same fiscal.
 Coca and raw chocolate price constantly increasing.
 Rise in consciousness for less consumption of chocolate products.
7 Ps of Marketing
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Product: The Product ranges of Thornton makes a count. Right from Luxury Chocolates, Hot
drinks, Ice creams and biscuits Thornton forays into a bouquet of products. The other products
are based on festivals and Occasions.
Place –The Thornton products are available on UK and Ireland. The company makes attempt the
products are available all over the places catering to a huge customer base. The distribution
channels are geared up during festive seasons.
Price- High Ranges of Products specially geared promotions during Peak seasons like Easter
and Christmas.
Promotions- Thornton has a wide range of ways of promoting itself. We find that the promotion
strategy in the marketing mix is done through the television, posters, newspaper, online, radio.
We have seen that the company has made great efforts to make its product reach the people and
make the people generally during the festival time. There promotions are time based and
Seasonal and generally focuses on a limited time and segments.
The 4 principles of Marketing (Product, Place, Price, Promotions) are best thing to start when
looking for an effective marketing policy. On modern day scenario the “4 p’s” has been changed
and developed as the Seven P (‘Process’, ‘Physical Evidence,’ and ‘People) are the new
inclusions’ (Movchan,and Karpenko, 2014). With an upsurge in Techniques and Technology, in
today’s world ‘”7 p’s” have limitations in terms of marketing analysis and Contemporary
Management opines “Web 4.2 including ‘Personalization’, ‘Participation’, ‘Peer-to-Peer’, and
‘Predictive Modelling’. Though not denying overview into Thornton’s World’s marketing
strategy. Generically the ‘P’s’ of the marketing mix, the new theory integrates the customers and
the visitor Customers who may come to the site as well.
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PESTLE Analysis of Chocolate Industry
The PESTLE analysis will enable to highlight on different MACRO economic factors which will
contribute to the growth and development of the Chocolate majors based out of UK.
Political
In UK the change of government from Labour Party to Liberal Democrat will have a significant
change in the chocolate and Industry operation. As per last reports, the chocolate and
confectionary industry provides employment to 19060 individuals (IBISWorld, 2018). However,
the strong decisions on hiring may have serious repercussions on the hiring scenario in near
future.
Moreover, the Value Added tax has risen by 2.5 % recently has posed challenges to the
organizations to make payments to their stake holders. Due to market saturation and fluctuations
the Profit of Chocolate and Confectionery Industry has steadily fallen over the past five years.
On 2007 Chocolate Major has outsourced its HR and Accounting Wing to India in an attempt to
bring down the Operational Expenses. This has posed a serious threat to the employment in UK
(Retail Gazette, 2014).
Economic
Although the recession has adversely affected the Disposable income at hand but Sales however
was very steady on the industry. Several new brands and Promotions has helped the market to
grow and sore new outlets to be opened based on expansion models. Brands Like Halls, Diary
Milk, Trident Gum etc. sold well and impacted the other industries like Advertising, Media and
Promotions in a positive way. The rise of the overall chocolate market over 13% during the
period of 2010-2015, hitting 101 billion USD (Zhang, 2016).
Social
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Chocolates and Confectionery were more acceptable Products worldwide, they are specially run
by family owed units who served the opposition to Alcohol to diversify the Products in to Tea,
Coffee, Ice cream and biscuit category.
In addition, there are rising awareness globally were chocolates are attributed to causes of
obesity. Many doctors and Nutritionist are promoting globally to curb out the consumption of
chocolates. More number of people are getting used to consuming dark chocolates, learning from
the benefits of consuming dark chocolates (Zhang, 2016).
Technology
Last but not the least, technology contributes major share in changes in Chocolates production
and Packaging over the last decades. Introduction of robotics, Brewing Machines, Cocoa grains
has brought about a catalyst effect in the production of chocolates from traditional modes
(Zhang, 2016).
Environmental:
The major production of cocoa is in West African nation, due to the hot and humid climate. the
rising temperature is analysed to pose a threat to the cocoa plants in the regions. In near future,
the annual rise in temperature will result in making the region unsuitable for the growth of Cocoa
(Zhang, 2016).
SWOT Analysis – Thornton Vs Competitor
SWOT Analysis summarizes the Strength, Weakness, Opportunity and Threats which are
analysed to devise the best suited strategy for the company. The SWOT for the Competitor as
well help to align the companies status quo in a practical framework to enable better decision
support system.
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Company Strength Weakness
Thorn tons High Quality Product, One
Manufacturing Site, Gift
Marketing
Complex Packing, High Price,
Only target UK Market
Cadbury World Wide Brand, High
brand loyalty price
Quality of Product, Limited
Product, Seasonal Sales
Hotel Chocó let High Quality, Offer more area
of Product, Worldwide
Product
High Price, Relatively new
brand, Bland Marketing
Lindt Highly regarded worldwide,
High quality, Excellent brand
High Price Product, Realize
mostly seasonal, not easily
available
Table SWOT Analysis
(Created by Author from EUROMONITOR, 2017)
The table above provides a comparison of the internal aspects of Thornton with
The Opportunities of the Thornton Brand can be attributed to Presence in Online Modes with
Automation models, Expansion in to Foreign Market, Internal Organic Development and the
threats on other hand can be attributed to the posed from the Competitor, supermarket own stores
and small operators.
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Recommendations
Thornton should focus on Revitalize and refresh the products, Restore the Market Profitability as
well as expand on global presence and finally rebalance and grow which means products are
available where the right customers wants them.
Based on the above analysis done following recommendations are advised to have a better
impact on the Top line and Bottom line and have a incremental share on the pie of Chocolate
Industry.
a. Market Penetration
In order to enable enhanced penetration in the Market Thornton should adhere to
Competitive Pricing which will help the organization to capture the Competitor Market
Share. Moreover, in line with modern day business methodology, Online presence to be
significantly improved so as to capture new customers digitally.
b. Consolidation
Presently the company has 247 stores around UK Market which are operational on a
franchisee model. The company’s operational profit is significantly affected due to the
bottom performing franchisee units. There should a serious look from the management
team to consolidate the profit by downsizing the loss bearing units.
c. Market Development
Thornton requires revamping the Distribution Channel to have a enhanced effect on the
FMCG model of business. The geographic scope requires to be expanded outside
purview of UK and Ireland. The Chinese market is having a huge impact in the growth of
business models of European Businesses. To leverage this platform Online presence is a
compulsory component which will enable Thornton to take the next level.
d. Product Development & Diversification
Thornton requires creating new products for existing markets. From Competitor product
analysis new Luxury chocolate biscuits are gaining significant market share which can be
introduced by Thornton. New Markets which are profitable can be ventured more enhanced
global share.
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e. Manufacturing Units to be Increased
Last but not least, the main bottleneck for Thornton accounts from the face that the company has
only one in house manufacturing unit. This is a great cause wherein the Organization is not able
to fulfil its requirement during the Peak seasons and a significant order remains unfulfilled. The
Management should work on model based out of franchisee mode during peak season wherein
this bottleneck can be addressed.
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Task 2
Comparison of 7Ps of marketing Mix between Thornton and Cadbury
Marketing mix Thornton Cadbury
Product Product of the company can
be referred to as something
that should to be offer in the
market for its attention, use or
its consumption, which might
satisfy need or want, and its
acquisitions as well.
Thornton’s product available
as Swiss, continental and
Belgium chocolate as dark
chocolate only and as toffees,
fudges as well (Luo et al.,
2015).
It provides wide variety of the
products to its customer. The
different product of which is
available in the markets
around the world is chocolate
bars, chocolate cookies and
Diary milk. These products
contain more milk in
comparison to the other
chocolate making companies
around the world and the
products of Cadbury have zero
percent any drugs in their
chocolates (Groucutt and
Hopkin, 2015).
Price Price of the product can be
related as the sum of money
that a company charges for its
product and services. Prices
are quite high in comparison
to Cadbury chocolates
(D'Souza and Tay, 2016).
Cadbury as a company
provide chocolates in all
affordable sizes which ranges
from rupees 5 to rupees 500
and more. The price mainly
varies depending upon the size
of the chocolate and its
additional flavors (Groucutt
and Hopkins, 2015).
Place It is UK based and it has sales
in countries Ayrshire, Bristol,
Bedfordshire,
It is global company and
stands as second largest
confectionary brand
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Buckinghamshire and
Aberdeenshire etc (Luo et al.,
2015).
worldwide. It has sales in 165
countries and has
manufacturing plants in
almost 60 countries. It is
available to its customer’s
easily as it is sold in every
stores and shops.
Promotion Promotional as marketing mix
is very important criteria that
to be considered by the
company for its increase of the
sales. Promotions are
occasional based and is
promoted with slogans “It’s
the Thornton’s that counts”
or “chocolate Heaven since
1911”( Mai ., 2014).
As a company Cadbury spends
lots over the promotion of its
most popular product Cadbury
Dairy Milk including
organizing events, broadcast
on TV’s, promotion on
internet sites and trough
posters and campaigns which
is popularly quoted as “Kuch
meetha ho jaye”, whose target
is to associate and relate dairy
Milk with the celebratory
occasions(Bharucha ., 2016).
People Few people know about this
product as there is less
advertising of the product in
countries other than UK.
People of countries loves
Cadbury and its different other
product because of its amazing
flavor.
Process Production process of product
is messed up. Turnover 214.8
Million Euros increased in
2009 but decreasing in profit
by 7.94 Million Euros. The
impact is on both
manufacturing and services
The process and operations
depends upon the variety of
cocoa, its processing blending,
cinching, tempering and
storage.
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(Mai., 2014).
Physical evidence Continental, Swish and
Belgium chocolates alongside
its novelties and decoration
bulk its sales.
Availability of variety of
shapes and flavors of
chocolate attracts customers
towards it (Bharucha., 2016).
Marketing strategy of Thornton
Marketing mix Thornton
Product Product is mainly UK based and there should more experiment with
the flavors of the chocolate to increase its sales thus the production
and profit (Mai, 2014).
Price Price should be affordable fro the common people of the country.
Range should be from rupees 2 to 500 plus.
Place It is UK based chocolate company. After Cadbury became the part of
the non-confectionary group, it is the only confectionery parent in the
UK corporation. Thus there is need that company should look over
this matters as to increase its sales in the other countries as well
(D'Souza and Tay, 2016)
Promotion Different promotional strategies should be used to let people know
about this product that exist as chocolate in different shape and size
through posters, broadcast, internet or social networking (D'Souza and
Tay, 2016).
People People know less about this product and are unaware. Thus,
promotions are essential.
Process Clear production need to be conducted with advanced technologies
involvement.
Physical evidence The shape of the chocolate should be more attractive to the customers
(Mai ., 2014)
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Conclusion
The chocolate industry is undoubtedly one of the most coveted industries in the world. There are
virtues, Vices, Boons, and banes of each strategy and recommendations but with the right
product mix and targeting the right sets of customers Thornton can gain in significant share of
the chocolate and confectionery Market both in UK as well as in Global Market
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