Critical Evaluation of Ferrero Rocher Marketing Management Theories

This report critically evaluates the marketing management of Ferrero Rocher, a premium chocolate brand. It begins with an introduction to marketing concepts, focusing on the FMCG sector and how Ferrero Rocher meets customer needs. The report analyzes B2B and B2C marketing strategies, emphasizing the importance of brand image and distribution. It then explores the marketing mix elements (product, price, place, and promotion) and the concept of relationship marketing, including Customer Relationship Management (CRM). The analysis extends to the external environment, including competitor analysis and a PESTLE analysis to understand the political, economic, social, technological, legal, and environmental factors affecting Ferrero Rocher. Finally, the report offers recommendations for increasing profitability, market share, and business sustainability, providing a comprehensive overview of the brand's marketing landscape.

CRITICAL EVALUATION OF THE CONTRIBUTION OF CURRENT MARKETING
MANAGEMENT THEORY AND PRACTICE
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TABLE OF CONTENTS
Introduction .....................................................................................................................................3
Part 1................................................................................................................................................3
B2B market type..........................................................................................................................4
B2C market type .........................................................................................................................5
Concept of marketing mix ..........................................................................................................6
Concept of relationship marketing...............................................................................................7
How to deliver value to the consumer from the chosen brand ...................................................8
Part 2 ...............................................................................................................................................9
Part 3..............................................................................................................................................16
Recommendations to increase profitability, market share and the sustainability of Ferrero
Rocher........................................................................................................................................16
References .....................................................................................................................................19
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INTRODUCTION
Marketing is the process of exchanging the products and services with money in which
company delivers the products to end users with the expectation of delivering quality and value
bale services (Brace, 2006). The chief product selected in the study is Ferrero Rocher which is an
Italian premium chocolate made from several ingredients. In this context, focus has been laid on
marketing concepts of FMCG products and how it meets the needs and demands of customers.
At the same time, researcher has also discussed importance of B2B and B2C marketing
concept for the brand entity (Ferrell and Hartline, 2010). Moreover, discussion has been included
regarding external and competitor analysis and along with the same, researcher has emphasized
brand capabilities and competencies. In the last part of the study, recommendations have been
made regarding the ways to increase profitability, market share and opportunities of business
sustainability.
PART 1
In the present research study, marketing concept has been discussed which is being
applied on the product “Ferrero Rocher”.
The present research study has been emphasizing on Ferrero Rocher which is chocolate
brand that is made with premium quality chocolate that meets all the needs of customers. Ferrero
Rocher has captured huge amount of market share because it comes in boxed chocolate and the
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distribution pattern is also effective because it has reached far and wide. Further, in terms of
stating about the unique qualities of the chocolate, it can be said that the brand offers a quality
and luxury product and the taste is also similar worldwide. It is available in several numbers
which showcases its demand and supply effectiveness.
The chocolate is also useful as a source of giving gifts; thus in most of the countries, it is
an ideal product for gifting. Roughly, 3.6 billion Ferrero Rochers are sold each year over 40
countries and which chiefly include European, Asian and American countries. It is traditionally
associated with Christmas and New Year and some countries hold a policy where the sweet is
sold only during winter season. As of year 2015, 61% of Ferrero Rochers were sold during the
last three months of the year which states that the chocolate has high demand for consumption. It
is also ranked as a premium quality chocolate because it is available in variety of packages for
both seasonal and special events. The brand has launched two new brands Ferrero Cappuccino
and Ferrero Rond Noir recently.
B2B market type
B2B marketing is highly important. In the same category, business entities should
promote the product (Ferrero Rocher) in such a manner so that other retail organizations can get
ready to sponsor the product. Ferrero Rocher is an Italian chocolate that is made as per the
preference of customers (Kemmer and Boden, 2012). It is also regarded as a premium chocolate
because of its packaging. In B2B marketing, the company producing Ferrero Rocher needs to
focus on the brand image so that promotional aspects can encourage other business entities to
sell the same. In this concept, it is essential for the business entities to focus on appropriate brand
message so that it can create good impression over the customers. Thus, it is clear that there are
several entities involved in the selling of Ferrero Rocher to the end users. In order to deliver
Ferrero Rocher, it is essential for the brand to emphasize on developing several contacts and
collaboration so that product can be suitably sold to the consumers. Moreover, with the help of
B2B marketing, Ferrero Rocher needs to emphasize on suitable distribution strategy for optimum
product delivery. At the same time, it is clear that B2B marketing is more appropriate as
compared to B2C marketing because it involves several channels through which brand awareness
can be developed (Brace, 2006).
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B2C market type
B2C market type is a process in which business entities sells the products to the
customers directly. For example- customers getting Ferrero Rocher directly from the
manufacturer. B2C marketing plays crucial role in enhancing the brand image of the product
through delivering it to the direct end users. At the same time, B2C marketing is also important
because Ferrero Rocher has affordable prices and people often the chocolate regardless of the
occasion. B2C concept is less important in FMCG products because consumers usually purchase
food products from supermarkets and retail markets (Hermann, 2009). Thus, it clearly shows the
need of intermediaries in selling the product and service. Moreover, different marketing
strategies are also required to be developed in the same so that the actual product Ferrero Rocher
can reach up to the direct end users.
However, in the case of B2C marketing, it is vital for the brand to focus on suitable
customer segment so that products can be delivered appropriately. This is also crucial for the
purpose of developing direct relationships with the customers. B2C marketing can be adopted by
Ferrero Rocher to avoid all the challenges that usually come in between communication
channels.
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Concept of marketing mix
For the purpose of enhancing brand image of Ferrero Rocher, it is essential for the
manufacturer to emphasize on all the elements of marketing mix. It plays imperative role in
selling more quantity of products through suitable use of all the elements. In this way, it can be
said that the brand (Ferrero Rocher) needs to focus on each and every element. Product: The main product of the brand is Ferrero Rocher which should be made up of
premium chocolate so that customers can buy it. Product should meet all the requirements
of customers because it is the only way through which it can be promoted among larger
customer segment (Handlechner, 2008). In this aspect, they can attract children easily so
that it will helpful to them for making effective environment in the country. Price: Price of the product (Ferrero Rocher) should be affordable so that it can be
purchased customers. Since, it is a chocolate; therefore apparently, youngsters and
children would like the product the most; hence prices should be set accordingly. Place: Place is an important element that plays crucial role in amending the level of
profitability. In this respect, the brand (Ferrero Rocher) can adopt different sources for
distributing the products; however that needs to be convenient. This can only assist in
grabbing the attention of customers (Fifield, 2012).
 Promotion: Promotion is an important aspect that needs to be managed in such a way so
that it can influence large number of people to purchase the products. Thus, in this
respect, the brand (Ferrero Rocher) has to emphasize on persuading elements so that it
can influence the mind-set of customers and can enhance the quantities of selling. For
promoting the product of cited firm, company can use social media, internet and radio.
However, on the other hand, Hermann (2009) stated that all the elements of marketing
mix are not possible to include in the product strategies because it typically enhances the
investment expenditure of the entity. The most important barrier that might occur here is the
prevalence of competition that affects the market situation and business activities.
However, on the other hand, it can be said that all the elements of marketing mix is
essential to be included so that products can be properly promoted at the market place.
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Moreover, elements of marketing can also assist in enhancing the facets through which growth
and success dimensions can be amended (Calder, Malthouse and Maslowska, 2016).
Concept of relationship marketing
The early modern marketing efforts were influenced by economic thinking; whereas the
concept has been changed and now it is dominated by consumer behaviour and unconventional
ideas of the subsequent process (Ferrell and Hartline, 2010). Relationship marketing focuses on
developing prominent relationships with the clients and this is the only way to deliver valuable
amenities to the end users.
Relationship marketing is also vital because that aids in involving the customers in the
selling process (Doole and Lowe, 2008). With this approach, the brand can also deliver optimum
services through identifying the needs and preferences of the clients. For example- the brand
(Ferrero Rocher) needs to get feedback and opinion from the customers on regular basis so that
certain improvements can be made in the product utility.
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However, Brace (2006) stated that there should be more concern towards organizational
resources because in order to develop better relationships with the customers, a lot of resources is
required to be implemented in all such areas.
At the same time, it can also be argued that CRM system is a typical business tool that
allows the business entity to manage customers, partners and prospects in one area. In the
commercial business world, CRM system is useful in tracking the activities which are concerned
with better customer management (Hermann, 2009).
Thus, contradicting the above definitions, it can be said that Customer Relationship
Management is regarded as a practice which is adopted by the companies to manage and analyze
customer interaction (Buckley, 2002). Further, it also improves business and customer
relationship and it also drives the customers for more purchase.
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How to deliver value to the consumer from the chosen brand
Organizational approach of the brand (Ferrero Rocher) must be focused on delivering
valuable services to the clients so that brand image and brand value can be developed. In this
context, the brand must make use of appropriate marketing philosophies and concepts (Kemmer
and Boden, 2012). This is also vital for demonstrating the quality of the product and as a result,
sales and profitability aspects can be increased (Dibb and Simkin, 2013). Customer always prefer
to have quality associated products; therefore the brand (Ferrero Rocher) should consider this
aspect on higher extent. This is significant not only to satisfy the end users; but also to retain
them for longer time span.
PART 2
External environment of the brand
Italian people usually prefer to have bakery and chocolate products; hence there are several
entities that work in the same domain. Thus, it can be said that Ferrero Rocher can have a
negative impact due to availability of competitor’s product. There are several external and
organizational factors that affect the brand value of Ferrero Rocher (Buckley, 2002). In this
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respect, environmental scanning is essential so as to ascertain all those forces which can impact
the brand value of Ferrero Rocher. The major competitors of Ferrero Rocher are Hershey’s, Kraft
Foods, Nestle Ltd and Mars Incorporated.
All these entities are producing the same sort of products and services; hence this can
create more competition for Ferrero Rocher. Further, customers may also switch to other brands
due to high availability of substitute products. Prices and promotional strategies of competitors
are highly competent that can create high completion for Ferrero Rocher. Apart from substitute
products, Ferrero Rocher can also experience issues related to marketing and business strategies
of other entities (Brace, 2006). There are several sources that can create more competition for
Ferrero Rocher and at the same time, it can also impact the competitive advantage of the brand.
PESTLE analysis
Political: In the context of UK, the change of government from the labour party to the
conservative and liberal democrat is bound to influence operations of Ferrero Rocher. There are
several stringent restrictions on the entry of skilled workers from rest of Europe and this also
hampers the business decisions of Ferrero Rocher (Kotler, Berger and Bickhoff, 2016). As
results, it will determine positive impact on the company operations in term of taking employees'
feedback. In respect to this, firm have to follow government rules and regulations for company
operations.
Economic: The global economic downturn did not affect the expansion plans of Ferrero Rocher
and the sales aspect remain steady. Due to economic prosperity, Ferrero Rocher is able to sell
high number of quantity which further has a positive impact on business aspects. In this context,
chosen business have to follow rules regarding inflation and exchange rates through company
will achieve their targets easily.
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Social: Because of social factors, Ferrero Rocher has come up in the market place and people
highly prefer to consume the products according to the occasions. However, on the other hand,
customers are getting more concerned about health standards and this is the reason they look
favourably towards the issue of obesity (Fortenberry Jr and McGoldrick, 2016). Thus, currently
many people have stopped consuming chocolate and candies because it increases the issues of
fat. Changes in taste preferences and perceptions also create major impact on the company
operations. Thus, firm need to make their transaction accordingly which help them to develop
their business in effective manner.
Technological: In order to cope up with technological aspects, Ferrero Rocher has adopted new
ways for production and packaging process so that customer attention can be acquired. It is the
role of technology only that aids Ferrero Rocher to come up with different sorts of packages.
Competitor analysis
Hershey’s, Kraft Foods, Nestle Ltd, Mars Incorporated and Cadbury are some of the chief
competitors of Ferrero Rocher which sometimes impedes the business practices in pessimistic
manner. All these competitors have been creating stern competition for Ferrero Rocher because
they also offer the same sort of products which are concerned with quality facets. Most often, it
increases the opportunities of customer switch over and as a consequence, it changes the market
scenario. Ferrero Rocher is having potential threats from the new entrants because of the
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marketing and business strategies (Di Benedetto and Kim, 2016). Ferrero is the world’s fourth
largest confectioner with a 5% share behind Mondelez, Mars and Nestle as per Euromonitor
international. Ferrero’s Nuttela and Tic Tac both the products are doing well and have also
highlighted rising volumes for Kinder Joy, Kinder Bueno, Ferrero Rocher and Kinder Surprise
(Calder, Malthouse and Maslowska, 2016). Further, the firm also made €537m in new
investment during the year to underpin the product in Germany, Canada, Italy, Brazil, Mexico
and China. The Ferrero Group continued to strengthen its presence in the hazelnut market in
order to guarantee and improve the quality of its raw materials. This also aids the entity to
provide a unique taste in products such as Nutella, Ferrero Rocher and Kinder Bueno (Baker and
Saren, 2016). In the year 2015, the group completed the purchase of all its equity interest in the
Oltan Group (which is a market leader supplier that produces hazelnuts chocolates).
The vision of Ferrero Rocher is to emphasize on customer’s needs as the company is inspired by
maximum transparency and excellence in quality. In this respect, the brand (Ferrero Rocher) also
maintains to consider the interest of employees and clients; hence for such purpose, they
emphasize on social beliefs. However, Ferrero has reported a before tax profit rise in fiscal 2014
which drives by a growing presence in Brazil, Russia and countries in Asia (Agnihotri, Dingus,
Hu and Krush, 2016).
Organizational strategy and capabilities
The Ferrero Group continued to strengthen its presence in the hazelnut market in order to
guarantee and improve the quality of its raw materials. This also aids the entity to provide a
unique taste in products such as Nutella, Ferrero Rocher and Kinder Bueno (Baker and Saren,
2016). In the year 2015, the group completed the purchase of all its equity interest in the Oltan
Group (which is a market leader supplier that produces hazelnuts chocolates).
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