Thornton PLC Market Plan for Christmas Shopping Season - Essay Example

? Market Plan for Thornton PLC for the Christmas Shopping Season Executive Summary This document is a marketing plan for Thorntons PLC, a chocolate manufacturing company based in the UK. It identifies the strengths and weaknesses of the company and matches them up with the environmental conditions that exists in the Christmas season. The report indicates that Thornton's PLC should focus on cutting down costs, improving convenience to consumers and enhancing communication. In doing this, there should be four main categories of services that the company need to focus on: Chocolate Sweets, Personalized Gifts, Hampers and Gift Ideas as well as Corporate Gifts. Based on the Boston Consulting Group model, it is recommended that Thorntons in Hull City should focus on the Star products that have high growth and high market share so that they expand on that and build profitability in the December markets. The paper concludes with guidelines on how to place, price, promote the Thornton chocolates in the December markets. Table of Contents Introduction …........................................................................................4 SWOT Matrix ….....................................................................................5 Marketing Objectives …..........................................................................6 Target Markets …..........................................................................7 Product Offering …..................................................................................9 Marketing Strategies …............................................................................12 Consumer Behaviour.....................................................................12 Marketing Mix for Marketing Strategy.........................................12 Components for the Thornton Marketing Strategy …..............................13 Product...........................................................................................14 Place:..............................................................................................14 Price: …........................................................................................14 Promotion.......................................................................................14 Implementation and Control.......................................................................14 Increasing Fanbase......................................................................................15 Sales Increase Objectives & Budgeting Plans.............................................15 Introduction “The marketing plan sets out the marketing objectives of the company and suggest strategies for achieving these objectives” (Westwood, 2002 p5). This means that the marketing plan is a tool that supports a business to market its products to the public. The marketing plan is somewhat different from the firm's strategic plan and/or business plan. The marketing plan is specific and provides a strong blueprint for the promotion and marketing of a given product(s). The marketing plan lays out specific production objectives, financial objectives and personnel objectives for given products that are going to be sold (Westwood, 2002 p5). During Christmas, sales increase tremendously. Stefanowicz identifies that sales in Christmas represents 14.3% of sales in the entire year (2010). This means that in a 12 month period, the month of December marks a disproportionately high level of demand for products. This trend could be attributed to the festive nature of the season and the fact that most people get a lot of bonuses in that people whilst others are prepared to spend more of their savings at this point in time. As such, it is appropriate for any business to have a marketing plan for such a period. This is because demand and sales could increase disproportionately in respect to the increase in the volume of buyers. This paper is a marketing plan for Thorntons PLC, a UK confectionery company. It examines how Thorntons can draw up a marketing plan that will enable it to capture the expanded Christmas market in Hull City in the United Kingdom. The paper will therefore examine the internal strengths of Thorntons. From there, marketing objectives and strategies will be formulated. Through the strategies and objectives, recommendations on implementation will be made for the attainment of the objectives. SWOT Matrix Thorntons is noted for producing assorted chocolates since 1911 (Brain Mass, 2011). This means that they have the best of expertise and have grown in terms of specialization for over a century. Thorntons produces boxed chocolates and luxury chocolates. They have the manufacturing expertise and have maintained the highest standards in the industry for the production of chocolates. According to Piercy (2002), the SWOT Matrix is one that helps an organization to get the best from its resources and competencies. In the SWOT matrix, the organization identifies its strengths and matches them with the opportunities. The organization also converts its weaknesses to strengths. This ultimately causes the threats to be transformed to opportunities. In the market for chocolates in Hull City, Thorntons has a confectionery on King Edward Street. The chocolate products that they manufacture in the city are sold to buyers in malls, supermarkets and different outlets throughout the city. The SWOT matrix is as follows: Strengths - Strong Thorntons brand that is already popular in the UK. - Efficient systems and technology for production and sales. - Specialization of staff in the production of chocolates - Good packaging that could be varied by the in-house package team. - Strong sales outlets with important market share. - Old promotions and packages that can be redone this Christmas season - Chocolate is one of the times in demand in Christmas. - Chocolates are appropriate gifts that can be added to hampers. Weaknesses - Excessive specialization - Old staff members - Need for review of systems and structures. - Aggressive technological marketing competition. Opportunities - Brand recognition can be an asset that can help customers to get interested in their products. - Technology promotes efficient marketing drives and can assist in meeting high production capacity. - Specialized staff members can help in meeting new objectives - The organization can easily build on old systems and packages. Threats - Specialization makes it difficult for the company to look at other new areas. - Old staff and systems could stand in the way of some radical innovation drives. - Technological marketing war could go in favour of Thorntons's competitors. Marketing Objectives In setting the markets, the company needs choose some important plans that are based on the 4Cs: Cost Convenience Communication Consumer Wants/Needs (McDonald and Wilson, 2011 p206). In all these four areas, Thorntons will have to set up objectives that will enable them to capture a larger market share and increase their sales in the Christmas period. This will be done in a way that the company will be able to put its strengths into the best use and also reduce its threats and weaknesses. In doing this, the following objectives are proposed: 1. Increase production capacity of the Hull City Thornton's confectionery by 30% across board and increase marketing and promotion budget by 20% between October and December. 2. Increase the the number of outlets available to customers to purchase Thornton chocolates in Hull City by 30% 3. Increasing the number of outlets where Thornton products will be available this will involve increasing the number of supermarkets, the online presence, the mobile marketing and advertising by a total of 30%. 4. Increasing consumer feedbacks, focus group interviews and surveys by 15% with a focus on Christmas shopping and what they expect in the festive period. 5. Increase the market penetration of the four main brands of the company by: Chocolate Sweets – 25%, Personalized Gifts: 40%, Hampers and Gift Ideas – 40% and Corporate Gifts, 30%. Target Markets The population of Hull City is estimated by the 2010 census to be 263,900 (Hull City Council, 2012). This means that the city is a relatively small one with a small market. However, the kind of strong interpersonal connection between the inhabitants makes it a unique place to conduct business. The HCC also announce that 19.6% of the population are aged between 20 and 29 years. This means that a sizeable number of the people are amongst the active population. Also, about 26% of the population are aged between 0 and 19. The mean age of the city is 35.2 years old. This means that the city is one with more people belonging to Generation Y, which popularly refers to persons born after 1980. The members of Generation X are rather fewer in Hull City when compared to the UK average. This implies that the people are generally younger than normal. Mitel (2011) identifies the dynamics of the chocolate markets in Hull City and the UK at large. They indicate that on the average, in the city, Chocolate Sweets are often consumed by persons between ages 0 and 19. This represents 65% of the total consumption of Chocolate Sweets. Young adults also constitute about 15% whilst the rest constitutes about 20%. Also, personalized gifts are often sent between individuals who are aged between 20 and 29. However, most of the recipients are between ages 0 and 19. The second largest group of senders are between ages 30 and 39. Whilst the second largest group of recipients of personalized chocolate gifts are between ages 20 and 29. This shows that the percentage of the market for these products are generally large in Hull. Hampers and Gift senders and recipients seem to be equally spread between households and businesses. Corporate gifts are often ordered by large entities for their staff members and other stakeholders (Mitel, 2011). This means that Thornton's has to focus on the younger generation in terms of chocolate and sweets. This is due to the fact that younger children form the most important group of consumers of chocolates and sweets in the Christmas season. In terms of personalized gifts, they will need to focus more on young adults. For hampers and gifts, the market is concentrated on households and businesses. Corporate gifts' market is centred on businesses and other corporate entities. As such, the marketers of Thornton's in Hull will have to be particular about the specific market niches to be able to attain the best and optimal results. Product Offering “A product is a set of tangible and intangible attributes which may include packaging, colour, price, quality and brand plus the seller's services and reputation. A product may be a good, service, lace, person or idea” (Koekemoer, 2004 p7). This means that a product is a thing of value that is offered to consumers. A product is the sum total of that thing of value that is put on sale for consumers to buy. “Product offering is what is visible to consumers and therefore communicated to the consumer by virtue of their appearance” (Koekemoer, 2004 p7). Thornton's offering is traditionally chocolates. However, the four main categories of products that can be put on offer during the Christmas festive period include the four main categories, Chocolate Sweets, Personalized Gifts, Hampers and Gift Ideas as well as Corporate Gifts. In the Christmas season, the company might need to focus on some important brands and products that will help them attain their best results in the timeframe. The Boston Consulting Group matrix is essential in taking this decision. According to the matrix, there growth of a firm's product and existing market share is placed on a continuum of high and low. This leads to four different kinds of products: Dog: This is a slow growth product in a slow growing market. Cash Cow: High market share but slow growth, often referring to a matured market where a business had focused on in the past. Star: High share in high growth markets Problem Child: Low share in high growth market (Okonkwo, 2007). In the case of the Christmas market, there is more of an opportunity for profitability rather than an opportunity for growth or survival. In this case, it is wiser for a firm to concentrate on a product with high market share and high growth – the Star. This is because the idea is to maximize profits from the available resources rather than invest money to maintain a stronger grounding. In this sense, only the Stars in Thornton's list should be encouraged to flourish at this time. This is because any other attempts could potentially lead to sinking of funds into a project with a long term view which might be counter productive in capitalizing on the opportunities of the Christmas markets and sale season. In Appendix 1, the products that come with important returns are displayed. They are shown below as follows: Category Star 1 Star 2 A: Chocolates & Sweets Designable Chocolates Classic Chocolates B: Personalized Gifts Alphabet Tuffles Photo boxes C: Hampers & Gift Items Best of British Hampers White Chocolate Hampers D: Corporate Gifts Affordable Corporate Gifts Champagne and Chocolate Gifts Hence, these Star products should be packaged appropriately and made available to the various consumers on the markets. This will lead to demand and higher concern and desire for the products and services of Thortons during the festive period of the Christmas season. Also with these different Star products, proper campaigns can be launched to promote the brands to various consumers in different parts of Hull City. Product / Brand Positioning Brand positioning is about how consumers perceive a given product or service (Okonkwo, 2007). Thus, for the best results in the Christmas period, there is the need for Thornton's to place its brands in a way and manner that will resonate with consumers' emotions and needs for gifts and sweets during the period. Kapferer identifies some important aspects and elements of brand positioning relevant to Thorton's Christmas marketing drive include (2012): 1. Personality: Thorton will need to identify a personality or star who can be strongly identified with their Christmas promotion drive. This personality could be a Christmas character, like a special Santa Claus or some important individual who can cause consumers to link the season with the brands. 2. Values: The values of the promotional campaigns must be one that mentions Christmas and the festive mood. This therefore means that there should be a strong branding arrangement that will incorporate the Christmas season with the services and products that Thornton's is offering at this time of the year. So a brand slogan like a Thornton Christmas or “Think Christmas, Think Thornton”. This will be the kind of connection and enhance brand equity. 3. Rewards: The brand must show clearly, the benefits that customers will get. The kind of social linkage that the gifts and chocolates give in the Christmas period should be emphasised in the product offering through the brand. 4. Functions: The different functions of the product should be emphasized. This should be done through a thorough discussion of what and how the different brands can be made available and used by consumers. 5. Features: The unique offering and features that the different brands will give to consumers must be presented. Marketing Strategies Consumer Behaviour. The Christmas season is a period where the volume of shopping increases disproportionately. However, Hoyer and MacInnis (2008) identify two important aspects of the Christmas shopping city which applies to Hull. First of all, they state that in the Christmas season, there are many items competing for consumers' disposable income. As such, Thornton's operations in Hull needs to be aware of the presence of competitors and other substitute products. Secondly, people have fewer time to go out and shop (Sharma, 2006). This means that Thornton Chocolates will need to be made available in different places like the Internet which can enable people to make orders easily and receive their orders quickly. Marketing Mix for Marketing Strategy Porter's generic strategy indicates that there are three main themes of competitive strategy: cost leadership, product differentiation and market segmentation (1985). These three themes can be important guides for the management and staff of Thorton in their bid to expand and take over the December market share. Cost leadership refers to the fact that Thorton can offer the best prices and the lowest costs to customers around this time. This will make consumers eager to buy their products rather than that of their competitors. Secondly, they can provide unique services like the photo chocolates and other personalized chocolates which will provide a service that is very unique from the offerings of other competitors. Also, Thortons can consider providing proper market segmentation which will enable it to provide specific products to specific persons on the markets. The strategies above [Porter's Generic Strategies] will signify a strategy that will enable Thorton to remain competitive and go ahead of its competitors. However, aside the competitive advantage, the company can pursue excellence in the December festive season. This is because consumers want high quality products and services that they can relate to. Treacy and Wiersema (1993) propose a triangular system made up of product leadership, management efficiency and consumer intimacy. Product leadership refers to a situation where they will provide different products that is unique for the festive period. Management efficiency refers to the fact that they will combine Thorton's resources efficiently for the best results and Consumer intimacy refers to the fact that they will spend money to learn more about the consumers and give consumers more options to get involved in the design and development of products. Components for the Thornton Marketing Strategy The marketing of Thornton to meet the Hull City demand for the Christmas markets should begin in October. Thus, from October, there will be different plans and activities that will be instituted to ensure that the company will meet the objectives identified above. Further details of this marketing strategy can be found in Appendix 2 below. Product: The company will need to identify important changes to the two products per category in the four categories that the company will focus on in the December sales season. This will mean they will identify ways of studying the consumers demands and expectations in October. This will be done through surveys and other studies of the markets. By November, the company will begin producing important volumes and quantities and present them to the markets. Place: This refers to where the products will be made available. In the case of Thornton in Hull, the various outlets like supermarkets and sales points will be provided enough stocks by November to last through the festive period. The most important element of the place will be the increment of the online sales outlets. There should be more and more options to sell online to consumers who do not have the time to go to conventional shopping points. The increment of the online presence must begin in October and increase steadily over the next two months. Price: Thornton's must first focus on price segmentation based on the four categories. Categories for younger people should be lower as compared to those of corporate and other older customers. This should take time and involve study of trends. After that, the prices must be monitored closely based on demand and varied over the festive period. Promotion: This refers to advertising, public relations and sales that is meant to ensure that consumers get interested in Thornton's products. For the December shopping season, there should be advertising at the beginning and this must intensify over the years. Then this must be supported by public relations and other endorsement activities that will make it possible for more consumers to get a wind of the offers available. Implementation and Control Implementation relates to turning plans to action (Lamb et al, 2010).. This involves activities that will change the whole plans of the organization to reality. This is laid out in Appendix 2, which shows how the different activities will be carried out at different stages and phases and the control and supervision that will be carried out. Increasing Fanbase There could be promotions and events in Hull City that will involve members liking the Thornton pages on Facebook, Twitter and other social networks. There should be an e-business team that will monitor online advertising and approach local firms in Hull and advertise directly on their web pages. Sales Increase Objectives & Budgeting Plans According to Thornton PLC's Investor Relations page, the company has an average turnover of ?218 million per annum. This is earned through a cost of sales of ?55 million. Hull's market is responsible for 5% of the sales which is about ?7.4 million. Thus based on the wider picture, it can be said that about ?2.52 million can be apportioned to Hull City. This means that in order to meet the objective, the company must increase the previous December's sales and cost of sales by 30% and 15% respectively. This will enable the company to fund the new drive and set high targets that will be worth achieving. References Brain Mass (2011) Analysis of Thornton PLC [Online] Available at: http://brainmass.com/business/accounting-business-analysis-financial-reporting/95537 [Accessed: August 7, 2012] Fifield, P. (2012) Marketing Strategy London: Routledge Hoyer, W. D. and MacInnis, D. J. (2008) Consumer Behaviour Mason, OH: Cengage Hull City Council (2012) Population [Online] Available at: http://www.hullcc.gov.uk/portal/page?_pageid=221,147225&_dad=portal&_schema=PORTAL [Accessed: August 8th, 2012] Kapferer, J. N. (2012) The New Strategic Brand Management London: Kogan Page Koekemoer, L. (2004) Marketing Communication Cape Town: Juta and Co Ltd. Lamb, C. W., Hair, J. F. and McDaniel, C. (2010) Essentials of Marketing Mason, OH: Cengage McDonald, M. and Wilson, H. (2011) Marketing Plans: How to Prepare Them, How to Use Them Hoboken, NJ: John Wiley and Sons. Mintel Oxygen Group (2012) Chocolates and the UK Markets [Online] Available at: http://academic.mintel.com/ Accessed: August 8, 2012. Okonkwo, U. (2007) Luxury Fashion Branding: Trends, Tactics and Techniques London: Palgrave MacMillan Piercy, N. (2002) Market-led Strategic Change Oxford, UK: Butterworth-Heinemann Porter, M. (1985) Competitive Advantage New York: Free Press. Sharma, A. K. (2006) Consumer Behavior Delhi: Global Vision Publishing House. Stefanowicz, K. (2010) “Tips and Tricks for Christmas Promo Season” [Online] Available at: http://blog.getresponse.com/tips-tricks-for-christmas-promo-season.html Accessed: August 7, 2012. Thorntons PLC Investor Relations (2012) Investor Centre [Online] Availabel at: http://investors.thorntons.co.uk/ Accessed: August 9th, 2012. Treacy, M. and Wiersema, F. (1993), “Customer Intimacy and Other Value Disciplines” Harvard Business Review Vol. 71 Westwood, J. (2002) The Marketing Plan: A Practitioner's Guide London: Kogan Page. Appendix 1 Product Offering Category A: Chocolates and Sweets Fig 1 Chocolates and Sweets that Customers can Design Fig 2: Classic Chocolates Category B: Personalized Gifts Fig 3: Alphabet Truffles Fig 4: Thornton Photo Boxes Category C: Hampers & Gift Ideas Figure 5: Best of British Hampers Figure 6: White Chocolate Hampers Category D: Corporate Gifts Figure 7: Affordable Corporate Gifts Figure 8: Champagne and Chocolate Corporate Gift Appendix 2 Marketing Strategy Marketing Element Activity Main Obligations October November December Product Product Development Interview consumers & Find their needs Full Focus Partial Focus Partial Focus Production & Conveyance Production team must meet targets and obligations Partial Focus Full Focus Full Focus Stocking and Re-Stocking Supply chain arrangements with Outlets Partial Focus Partial Focus Full Focus Place Expansion of number of outlets Identification of good locations within supermarkets and other outlets Full Focus Full Focus Partial Focus Identification of Online sales outlets Finding better means of selling over the Internet in Hull City Full Focus Partial Focus Partial Focus Increment of online presence Increasing online marketing and social networking Partial Focus Full Focus Full Focus Price Market segmentation Identification of different segments of the markets based on historical trends Full Focus Partial Focus Partial Focus Setting Prices Prices must be varied according to the objectives and monitored Partial Focus Full Focus Full Focus Monitoring Prices Prices must be monitored and changed easily throughout the period Partial Focus Full Focus Full Focus Promotion Advertising General insight to the products and services for the season Partial Focus Full Focus Full Focus Public Relations and Endorsements This will involve direct activities meant to educate people on specific activities Partial Focus Partial Focus Full Focus Read More