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Confectionery Industry In The UK Contributes A Major Amount Of Revenue To The Country's Economy

Chapter 1: Introduction

Confectionery industry in the UK contributes a major amount of revenue to the country's economy. Repeated case studies have revealed that the confectionery industry is ever growing and the demand for creativity and innovation in the products in increasingly demanded by the consumers in the UK market. Alongside, the growth in the confectionery industry has also resulted in the stiff competition among the players in the market with many global competitors like Cadbury and Nestle. The growth of more focused and niche market targeting companies have also grown tremendously in the UK, which includes companies like Thorntons, Ferroro UK ltd, etc. The stiff competition in the market and the increased penetration of the big players into various market segments has further disturbed the position of companies like Thorntons. This report is focused on the analysis of the marketing strategies for Thorntons Plc and provides valuable suggestions for future expansion and strategies to gain competitive advantage in the UK chocolate market. The report aims to achieve the following objectives

  • To effectively segment the target market for Thorntons and identify those segment(s) here the company can effectively develop its business.
  • To identify the importance of buyer behaviour and establish that the effective deployment of buyer behaviour would help the company understand its target market in detail so as to gain market share.
  • Provide recommendation for an appropriate short-term promotional campaign in the UK for increasing the awareness on the company's products in the target market.
  • Devise a sales or promotion campaign for the company in order to increase its sales through focusing on establishing the brand of Thorntons in the market as a strong competitor.
  • Present a critical analysis of the advertising strategy mentioned in the case study for Thorntons and device a new advertising strategy that would include a creative media based plan in order to increase the awareness among the customers in the target market
  • Also device a critical structure for the direct marketing plans in order to reach the over 50 years segment of customers in the UK market.

Chapter Overview

Chapter 1: Introduction

This is the current chapter that introduces the reader to the objectives of the report and the flow of the report text.

Chapter 2: Market Segmentation and buyer behaviour

This chapter first presents an analysis on the market segmentation and identifies those segments that the company should target upon for further market expansion. This is then followed by the overview of the buyer behaviour and the use of buyer behaviour by the company in order to gain competitive advantage in its target market.

Chapter 3: Advertising and Promotion

This chapter first presents a discussion on a short-term promotional campaign for the company in order to increase the awareness of the products in the existing target market. This is then followed by a detailed overview of the advertising plan incorporating creative plans in the media based advertising in order to promote the products of the company. This is then followed by a critical analysis on the direct marketing strategy for over 50 years segment of customers in the UK in order to effectively reach that segment of the market so as to increase the sales as well as the market share.

Chapter 4: Conclusion

The objectives of the chapter are reviewed against the research and analysis conducted in the previous chapters and then a conclusion is derived based on the results of the analysis.

Chapter 2: Market Segmentation and Buyer Behaviour

2.1: Market Segmentation

From the case study of the company it is evident that the major segments in the Chocolate market include

  • Count lines
  • Moulded Bars
  • Boxed Chocolates
  • Seasonal Products and
  • Bagged Self lines

It is also evident that the company under debate i.e. Thorntons Plc specialize in the manufacture and sale of Boxed continental chocolates in the UK and global market. Hence the market segment that the company primarily operates is under the sub sector of the Boxed chocolates in the Chocolates industry of the UK. A further segmentation of the Boxed Chocolates market in the UK based on the price and quality is presented below

Low Price and Low quality

Economy value products from Super Markets

Retail chains like the Pound land that sell products for a pound

High Price Low Quality

Low Price High Quality

Premium value product lines from the super markets

Products from manufacturers like Cadbury and Nestle who have a greater market share in the chocolates market and a brand image

High Price High Quality

Thorntons Plc

Marks and Spencer

From the aforementioned segmentation it is clear that the market segment that the company is targeting upon is especially to those customers who are intending to purchase boxed chocolates for special occasions like Christmas and gifts for other occasion that they value the most. This apparently makes the company to operate in a Niche market as identified by Frances Brassington and Stephen Pettitt (2003). Alongside, the authors' argument that the market segmentation of a company will provide a view on its current position and the possible areas for expansion in the future for expansion by identifying new market segments is evident from the above segmentation provided. The segmentation apparently proves that the company is operating predominantly in the premium segment of the market. In order to reach a broader target of the market it is thus essential for the company to introduce product lines that can be sold at a lower price without compromising the quality. The agreement of the company with many supermarket chains like Asda and Sainsbury is in light with the extension of its sales but the fact that they are still of higher price when compared to the own brand products like the Sainsbuy's taste the difference range of items in the shelf will apparently encourage the customers to overlook the Thorntons products. Thus it is essential to not only establish the presence in supermarket chains but also to introduce products that are competitive in price with respect to the products sold under the category in the supermarket chains.

It is also essential to note that effective pricing strategies is always lucrative to the business and opens new markets for the company. The argument by Philip Kotler's (1988) that by effectively segmenting its target market based on the price and providing product range that meet the expectations of the target customers in both price as well as quality makes it clear that the current position of Thorntons Plc is only in the higher price category even though its quality is second to none. Thus it is essential for the company to present a product line that meet the demand of those customers who are interested in quality products at competitive products. The rise of Supermarket chains like Asda, TESCO etc has actually further increased the demand for quality products without compromising the price among the customers and hence it is essential for Thorntons Plc to establish their presence with a competitive pricing strategy in the market so as to enter new target market segments.

Alongside, in the existing segment of higher price and premium quality products, the company is faced by competition form big players like Marks and Spencer who are established as a brand for quality in the retail sector. Apparently, the current strategy is successful only during the busy season of Christmas and other festive seasons in the UK through which the company generate more than 50% of its revenue. Hence in order to effectively increase its sales even during the normal days of the year, the company should adopt effective promotion and advertising strategies in order to create the awareness about the new products being introduced in the shop especially for the season.

Alongside, the current segmentation is only targeting on the whole of the market segment under high price and premium quality. This kind of approach is rather crude since it is established by Philip Kotler's (1988) that the customers in a give market segment itself need to e further segmented based upon their likes and necessities in order to effectively tailor the products and reach the customers with more specific products that would attract them. In the case of Thorntons Plc, this can be effectively achieved by categorising its existing market segment into sub-categories where by the company can effectively deploy its innovative strategies to further increase its sales even during the periods of bleak sales like hot summer. The fact that Thorntons Plc is continuously introducing innovative strategies like the Cafes and cake, retail outlets in partnership with Birthdays which will apparently boost the sales. These innovative strategies need to be further refined through the effective segmentation of the product lines not only based on the season but essentially based on the customer needs and the trends of their likes and dislikes that vary with the season.

Hence, it is recommended that Thorntons Plc further segment its existing target market in order to effectively use its innovative strategies to generate revenue. The major issue for the company is the fall in sales during the periods other than the major festive seasons like Christmas and Easter. Hence by deploying its innovative methods in manufacturing and partnership through effective segmentation of the existing market segment will actually increase the sales of the products in the existing market segment itself. For example, by introducing a promotional offer for the continental chocolates for birthday presents during the summer by providing free packaging will apparently increase the interests of the customers in the Thornton's chocolates as an alternative to birthday present because of the free packaging promotion. The concept of promotions and advertising is discussed in details in the next chapter.

The above argument also applies for the company to expand its market in the new target segment as well. This is mainly because of the fact that the company can gain a considerable market share in the new target market segment (i.e.) low Price and Premium Quality segment only when the company identifies the demand of the customers and further classify its products based on the customer demand so that it can effectively reach the target market.

Since it is clear that the company pioneers in producing innovative products, the effective market segmentation combined with the innovation of the company will tremendously increase the sales for Thorntons Plc. Apart from the fact of innovation and sales, it is essential for the organization to establish its presence in a broader market segment in order to meet the stiff competition in the market. This is mainly because of the venture of big companies like Nestles and Cadbury in producing boxed chocolates even though they are not categorised as the fresh chocolates like that of Thorntons Plc. It is also evident that Thorntons is aware that the customers do not expect freshness in the chocolates because of the long shelf life of the trivial chocolates. Since the company is committed to the production of fresh chocolates, it is out of question to suggest the company to introduce a rage of the chocolates produced in the normal fashion like its competitors without compromising the quality as well as achieving lower costs in the production since the labour involved in the fresh chocolate production is very high compared to that of the bulk production of vegetable fat based chocolates that are sold by the competitors like Cadbury and Nestle.

2.2: Buyer Behaviour

Frances Brassington and Stephen Pettitt (2003) say, The buyer behaviour plays a key role in identifying the target customers in new target market segments and also to increase the sales in the existing market segment. This is further justified by the argument of Philip Kotler (1988) that the market segmentation is effective only when it embraces the buyer behaviour in the market and presents its product range in a manner that it reflects the buying behaviour of the customers in the target market segment. In the light of the aforementioned arguments, when we analyse the chocolate industry as a whole in the UK, it is clear that the buyer power for the boxed chocolates and confectioneries only 28% . This proves that the buyers in the market are quiet less in the boxed chocolates category because of the fact that they are quiet expensive and above all the customers are under the perception that the boxed chocolate products are essentially for occasions only. This apparently acts as a barrier to the sales growth of the company in this segment of business. Alongside, the buyer behaviour in the boxed chocolate sub category of the chocolate industry is more towards the supermarket own label range of premium products. This is apparently because of the faith of the customers in the product quality and its relatively low price when compared to other high street retailers like Thorntons Plc. Alongside, the buyer behaviour is also affected by the change in the season and the rise in needs during the festive seasons like Christmas and Easter. Alongside, during the bleak seasons of the year as well, many popular brands like Cadbury have a higher rate of sales in the boxed category of chocolates through the Cadbury's Roses and other leading brands like Celebrations. This is mainly because of the pricing strategy and the effect of the supermarkets that sell branded products at comparatively low prices since they buy the goods at a lower cost and also sacrifice a little amount of margin in the profit in order to increase their sales.

Alongside, the survey by BMRB for Keynote market review on the confectioneries has revealed that the female customers who buy the boxed chocolates are higher than the male customers apparently revealing that the buyer behaviour must be addressed by the company based on the categorisation of sex as well. This further emphasises that Thorntons Plc should not only target the market by segmenting based on the pricing strategies but also segment the market based on the sex in order to effectively harness the buyer potential in the target market. Apparently, in order to reach the female buyers in the target market, the company can launch promotions that would catch the attention of the female buyers in the market and also to effectively tailor its products based on the interests of the buyers in the target market. This is also in lieu with the response of the customers to the boxed chocolate products that have a longer shelf life and are also available at affordable prices without compromising the quality of the products. This apparently proves that the buyer behaviour is an essential factor in identifying the target market and segmenting the customers in the target market so identified.

With respect to the company under debate the above discussion can be deployed by Thorntons Plc through producing its products to meet the demand of the customers based on the buyer behaviour that changes erratically with the change in the season as well as the festive occasions, Thorntons Plc should take into account the buyer behaviour in order to design an effective promotion strategy so as to create awareness among the customers and promote sales.

Alongside, from the analysis of the buying behaviour of the consumers in light of the Philip Kotler's (1988) classification of buying behaviour it is clear that the buyers in the boxed chocolate category are habitual in nature and the buyers do not see much of a difference between brands since the general perception that the boxed chocolates are always of good quality irrespective of the brands. Hence, a classification of the product in order to establish its uniqueness Thorntons must further emphasize in promoting is products not only based on its products but also essentially based on the price so that a combined promotion on price and quality will apparently increase the awareness about the product among the customers eventually increasing the sales thus generating revenue. Alongside, the argument of Philip Kotler (1988) that the customers give little heed to the unique identity of the products in the market when they are frequent buyers and mainly emphasize on the price of the products only as a key to differentiate between the brands, makes it further essential for Thorntons Plc to adopt an effective pricing strategy that reflects the buying behaviour in the target market.

From the aforementioned arguments it is clear that Thorntons Plc can generate potential sales in the target market through effectively identifying the buying behaviour of the target customers and then presenting its products range by adopting and effective pricing strategy. Furthermore, it is clear that since the chocolate buyers are generally routine buyers and that the market trend is essentially based on the season justifies that the by identifying the buyer behaviour in the target market and adopting effective promotion and pricing strategy Thorntons Plc can gain competitive advantage in the target market.

In the next chapter, an analysis on the promotions and communication of the products to the customers is discussed with respect to the company's policies in order to critically evaluate its position in the business.

Chapter 3: Advertising and Promotion

Advertising and promotions is the key to success of any product in the market. In the chocolate industry where the competition is further intense with the increase in the globalisation and the innovation among the competitors to present products that attract the consumers in order to increase the sales and gain market share. This chapter presents a short-term marketing promotion plan that Thorntons can adopt to create awareness among the customers in its current target market. This is followed by a detailed analysis and design of a promotion plan that aims to create awareness and increase sales along with the ultimate goal of establishing itself as a competitive brand entity in the chocolate market.

Frances Brassington and Stephen Pettit (2003) say that the promotion of a product is essential for the successful sales and growth in the business since the current market trends in the business is increasingly competitive along with the continuous innovation, which has apparently flooded the consumers market with a swarm of products under every range. Furthermore, the promotion of a product should reflect on the then trend of the market in order to emphasize on specific features and innovation on the products so as to create the awareness among the customers in the target market. The short-term promotion plan discussed below aims to achieve in creating an awareness about the products from the Thorntons Plc especially focusing on the products released for the summer through the use of a promotion plan.

3.1: Short-term Promotional campaign

The promotion model that is suggested to use for the short-term promotion plan is the AIDA model described by Philip Kotler (1988).

The three stages that are encompassed by the AIDA model of promotion are

Cognitive stage: This is the stage where the company tries to gain the attention of the customers in the target market through initial advertising. Frances Brassington and Stephen Pettit (2003) mention this stage as the brain storming stage where the customer is reached with catchy adverts through media highlighting the latest products that are especially released for the season. The products like the 'Year Of Confectionery starting April 2005' that is promoted by The Thorntons in their website should be advertised through the media as well as through popular new papers and magazines. The fact that the customers for boxed chocolates are mainly under the age group of 30 years to 45 years in the working class of the UK community (Key note, 2005) can be utilised by the company through playing their advertisements in the television during the peak hours of watching i.e. during the evenings of the day when people normally wind up at home in front of the television.

This can be achieved though proper budgeting whereby the marketing manager should allocate funds for the short-term promotions separately from the long-term advertising promotions. Alongside, the fact that the free communication between the personnel at different levels of the organization will help derive on the optimum amount of the advertising budget allocated to the short-term promotions. Apart from this, it is also essential that the expenditure be well planned in order to utilize not only the television media but also other forms of advertising like the radio adverts and above all promotions through leaflets.

Since the promotion is designed on a short-term basis it is essential to gain the attention of the customers in the cognitive stage itself since creating awareness and then gaining the attention of the customers in order to create interest is a long time consuming process which cannot be accomplished effectively within two or three months for which the sort-term promotion plan is normally aimed for.

Hence the advertisements designed must be able to convey the right information in a short period of time also in such manner to gain the attention of the customers quickly. This is normally achieved by presenting the advertisements in a more entertaining and informative manner with the presence of a leading public personality (for example develop the promotion plan with the advertisements starring a pop star which will immediately gain the attention of the public even though they like the music or not). Apparently, the expenses associated with such advertisements must be monitored and one should keep in mind that the short-term promotion plans would always strengthen the long-term advertising strategy of the company itself. Thus by achieving a good short-term promotion plan, Thorntons Plc can obviously create its long-term plan focusing on more critical elements like branding and market share.

Affective stage: This is the stage where the AIDA model aims to develop interest and increase the desire on the product. Since the promotion plan is a short-term venture, Frances Brassington and Stephen Pettit (2003) say that this stage must be carried out in parallel with the initial cognitive stage (i.e.) Thorntons Plc should introduce any promotions on its summer range of products in parallel with the cognitive stage and possibly incorporate the promotions in the advertisements itself which will not only gain attention but also develop interest among the products eventually increasing the desire to acquire the product. The affective stage of the AIDA model further emphasises on the fact that the short-term promotion plan must reflect upon the current situation and the trends so as to effectively create the interest among the target customers. The intense advertising promotion by Nike Plc during the Euro cup 2004 starring the popular football stars increased he company's sales among the football admirers who purchased the Nike products mainly due to the increased desire from the advertisements.

Behaviour Stage: This is the stage where the customer intends to actually purchase the product. This stage is the most critical stage since the company should understand the fact that the customers are intending to purchase the products due to the interest created among them through the advertisements and promotions. In the case of Thorntons Plc, this stage can be effectively achieved through presenting the product lines that are advertised on the promotions in such a manner that would immediately gain the attention of the customers who are shopping. The fact that the Thorntons Plc generates major portion of its revenue through its presence in the high streets makes it clear that the company can effectively present its promotions to the customers in their retail outlets. The strategic positioning of the stores in key places like malls, shopping centres etc can be well deployed to achieve effective sales. Alongside, it is essential that in order to gain customer satisfaction in the market, the company should always present its products and promotions exactly in par with the message communicated through the advertising channels. This is essential in order to gain the confidence among the customers that the company is loyal in its promotions and that the quality of the products are not degraded in any form with respect to the promotions advertised. This strategy will not only increase the customer satisfaction but also gain the customer loyalty, which will obviously retain the customers for Thorntons Plc on a long-term perspective.

The aforementioned arguments make it clear that the short-term promotions and the message conveyed through the short-term promotion strategies form the basement for the long term promotion plans for an organization and Thorntons Plc should thus effectively deploy its budgets for creating lucrative short-term promotion strategies.

A generic plan for the short-term promotion that reflects on the summer products of the company is tabulated below. The promotion plan is proposed to run for a period of 3 months starting from the early summer up to the middle of August.

Task

Time period

Initial advertising to gain attention of the target customers commencing the middle of May 2005. This can be accomplished through intense advertising (i.e.) telecasting more the same advert frequently on the media (radio, television, etc)

Three weeks

Communication of the promotion and the new products along with the advertisements.

This task must be carried out in par with the existing communication modes (i.e.) the advertisements that are currently being broadcasted on television and radio

Eight weeks up to the middle of August from when the frequency should be reduced.

Presentation of the products on the shop floor and the website with respect to the promotions.

Throughout the promotion period.

From the above sequence of activities, Thorntons Plc can effectively achieve increased sales during this summer. Also, it is essential to note that since Thorntons Plc is also involved in the electronic mode of retailing any promotions that are announced must take immediate effect both over the Internet and the stores. Also by introducing additional online promotions, the company can further leverage potential sales eventually generating revenue.

3.2: long-Term Promotion Plan

The detailed discussion of the short-term promotion plan above has established the following facts that are common to both long-term and short-term promotion plans for any organization.

  • Effective communication of the message about the product and company.
  • Present the products with respect to the promotion either short term or long term and create confidence among customers about the company's commitment to its message.
  • Achieve customer loyalty and increased sales through rigorous deployment of the aforementioned points.

The above-mentioned statements are in par with the arguments by David Jobber (2004) who argues that the long-term as well as the short-term promotion should reflect upon the company's core policies and strategies, which will attract the customers in order to effectively, generate sales.

The long-term marketing plan must reflect upon the core strategies of the company and encompass the commitment of the company to sensitive matters like quality, satisfaction and reliability. For example, the advert by Del Monte, a popular fruit juice company that the company's personnel will not compromise for anything to quality of the fruits that are used as ingredients to their products has apparently created an impression of high quality and commitment to the target customers.

The long-term promotion model for the company under debate is designed using the 'Communications Model' described by Philip Kotler (1988). This type of response hierarchy model encompasses the same three stages as described in the short-term promotion plan but only the ingredients of the marketing mix (i.e.) the contents of the message as well as the strategy of advertising alone varies. This is described below

Cognitive Stage: As opposed to the AIDA model where the company aims to gain the attention of the customers in the initial stages itself, the communications model actually communicates the core principles and policy of the company that reflects upon commitment and reliability to the customers. The stage involves the process of creating a total awareness about the company and its policies (as opposed to the products) to the customers. This is achieved through developing exposure and communicating more sensitive messages through repeated adverts of short-duration that appeals to the customer's emotional and mental attitude on quality and reliability. In case of Thorntons Plc, this can be achieved through a brief demonstration of the company's method of producing the hand-made fresh continental chocolates (the flagship product) in the television adverts. Alongside, it should be agreed that the company communicates its message in such a manner that the short-term promotions of the company are in the similar lines of opinion. This can be achieved by commissioning the same advertising agency to deliver both the short-term and long-term promotions like in the case of Cadbury Plc, which initially had two different agencies to conduct its short-term and long-term promotions, both within UK and on a global basis. The company then consolidated its operations under one roof in the year 2002 as mentioned by Ruth Mortimer (2003).

From the case study of Thorntons Plc, it is evident that the company has not concentrated in effectively deploying the long-term promotion strategies in the light of communicating the company's core values to the customers. Hence through the use of 'Communications Model' of promotion and advertising, Thorntons Plc can effectively create a positive opinion as well as increase the awareness about the company and its products among the consumers in the target market.

Affective Stage: In this stage the 'Communications model' aims to develop a positive attitude among the target customers about the company itself. When compared to the short-term promotion plan, which aims to increase the desire among the consumers to purchase the product, the long-term objective of an organization must be to create the attitude and intention among the target customers about the company and its products as argued by Frances Brassington and Stephen Pettit (2003). Thorntons Plc, should thus frame its long-term promotion strategy to create the attitude among the customers. Through the efficient communication and rigorous adherence to the policies communicated in the stores, Thorntons Plc can effectively achieve customer satisfaction thus establishing itself as a brand in the confectionery market. It is apparent that Thorntons Plc is a major brand in the boxed chocolates category of confectioneries both within the UK and on a global basis. The brand image can be strengthened through effective communication of the company values rigorously through the advertisements; the company can further strengthen its brand position in the market.

This is essential for the organization especially while entering a new target market as proposed in the previous chapter where the company can gain potential customer base only thorough the promotion of its products under a strong brand image. Alongside, the fact that Thorntons Plc is partnering with organizations like Birthdays in order to promote the sales of the boxed chocolates as alternative form of gifts, makes it more critical for the company to maintain a strong brand image not only to increase the sales but actually to build a strong co-branding relationship with the partnering organization eventually entering new market segments apart from the trivial confectioneries market.

Behaviour Stage: On a long-term perspective the company should not aim in achieving sales through the advertisements but mainly gain the customer loyalty and create a strong brand image. This achievement will apparently act as the fuel for the successful short-term promotion whereby the customers are reached with the actual product promotion message as opposed to an advert that communicates the company's core values. The behaviour stage of the 'Communications Model' essentially reflects on the customer behaviour to the message conveyed by the company, which is apparently achieved through strict adherence to the core values of the company in the shop floor as well as over the Internet.

Thus a long-term promotion mix for Thorntons Plc must contain the following ingredients

  • Adverts that communicate the core values of the company.
  • The messages that are tailored to reach the customer with the message of quality and the company's commitment for customer satisfaction.
  • Effective analysis and rigorous adherence to the policies so communicated on the shop floor as well as on the cyberspace.

3.3: Critical Analysis of the current advertising method of Thorntons

From the case study of the company, it is clear that the company is indeed committed to producing quality products to its customers and especially focused in creating the experience of tasting the freshly prepared continental chocolates among its customers. The Keynote market (2005) review on the confectioneries market in the UK has also established that the company being a core competitor in the market spends a considerable amount on advertising and promotions. The fact that the company has a strong long term advertising strategy which is clear from the existing customer opinion about the products of Thorntons Plc. The advertisement communicating the statement 'The Art of a Chocolatier' has indeed created the attitude and positive opinion among the target customers, which is evident from the tremendous sales during the Christmas and other festive seasons. Hence, it is clear that the short-term promotion and advertising strategies of the company needs to be refined in order to increase the sales during the bleak seasons. The partnership with other organizations leading to co-branding strategies can be well deployed only when Thorntons Plc effectively communicates its promotion to the customers in the target market.

Alongside, the company should also address its long-term advertising strategies in the light of branding which is essential for the company to identify ad enter new target markets so as to increase its customer base. This statement is based on the arguments in the previous section that the long-term promotion and advertising strategy of the company should enable it to build a strong brand image which will be the supporting element for the company's entry into new market segments. Hence it is clear the only through the strong brand image which is achieved by the long-term advertising strategies, the company can increase its sales in the existing target market as well as enter into new market segments with customized products.

Apart from the aforementioned arguments, the company also lacks the strategy of gaining the customer attention, which is essential for the successful communication of the message. This can be achieved through repeatedly telecasting a single advert of short duration through the media. The fact that the customers are surrounded by advertisements and promotion messages makes it essential for the company to increase the awareness only through the repeated broadcast of advertisements. Alongside, Philip Kotler (1988) says that the frequent telecasting of a short duration advert to the customers will not only increase the awareness but also increase the interest on the product among the customers which is essential for conducing a successful sale. From the case study it is evident that the company does not adopt this strategy to reach its customers, which is the primary reason for the fall in overall sales in the past few years.

3.4: Direct Marketing to the Over 50 years segment of the customers

The over 50 years segment of the market when classified based on the age is steadily increasing and also the fact that the existing younger segment of customers will apparently fall into this category in future makes it essential to address this segment of the market with a specific advertising strategy.

Lower Activity level: It was established that the women in the market segment are the major segment of the customers who purchase the chocolates from Thorntons Plc. Apparently, the activity level of the women (i.e.) level of exposure to the outside world reduces with the increase in age and the fact that many women in the UK opt for an early retirement in order to raise the families further justifies the lower level of activity among the female customers in the over 50 years segment of the market. Alongside, it is also interesting to note that even the men in the category of over 50 years have a relatively lower level of activity when compared to the younger age group of men thus increasing the need to device a separate marketing strategy to reach this segment of customers in the market.

The fact that the over 50 years segment of customers demand quality at an affordable price which is evident from the increased density of their shopping at supermarkets like TESCO and Asda, makes it essential for Thorntons Plc to tailor its message to this segment of customers. The potential of this segment of the market is tremendously increasing with the increased life expectancy of both men and women in the UK thus increasing the population of this segment by multi fold levels. Thus Thorntons Plc should address this market segment in order to not only increase its sales but also to gain market share and overall a broader customer base.

The fact that the activity level of the over 50 years segment of the people in the UK is low makes it essential for the company to adopt a more different method to the trivial method of communicating through the mass media. The direct marketing option for increasing the awareness among this segment of the customers will prove successful.

The process of direct marketing mainly supports the short-term promotions of an organization. The direct marketing can be achieved effectively through the circulation of leaflets and information pamphlets to the customers of this age group. Since the company has successfully established its stores in key locations of the high street, the promotion through direct communication in the form of leaflets will apparently increase the awareness among the over 50 years segment of the customers. Alongside, many retail supermarket chains involve in the method of direct marketing by dropping leaflets door-to-door in the neighbouring locations. Thorntons can effectively utilize this method since the target segment under debate are expected to be indoor more often and such form of communication of the promotions will apparently increase the awareness among the consumers thus increasing the sales.

Alongside, the argument of Frances Brassington and Stephen Pettit (2003) that direct marketing method will prove successful among those segments of customers who have a lower activity level justifies the aforementioned arguments. Since the company has a web presence with the capability to conduct electronic transactions, the company can effectively reach the target customers through the television marketing and encourage the customers to place the order over the internet which will apparently reduce their efforts to commute to the shop for the purpose of buying a box of chocolates or any other related products. Thus from the above arguments, it is clear that the direct marketing method will prove successful among the segment of over 50 years segment of customers in the consumer market.

Chapter 4: Conclusion

4.1: Evaluation of objectives

The analysis presented in chapter one on the market segmentation has proved that the company is currently concentrated in the market segment that is categorised under high price and premium products. In order to increase the sales it is recommended for the company to enter into the market segment for quality products at competitive price, which will apparently increase the company's sales as well as the customer base. This proves that the existing strategy of the company to produce high quality fresh chocolates must encompass the requirements in the new market segment and hence customize its products without compromising quality at a competitive price in the new market segment.

The analysis on the buyer behaviour proves that the company must strategically position its products based on the perception of the buyers and also that the company must price its products in such a manner that it reflects on the target market segment.

The discussion also revealed that the effective communication between the customers and the company is essential for effectively establishing the products in the target market segment.

The analysis on the promotions and advertising revealed that the existing strategy of the company is strong in the long-term perspective but does not meet the short-term instance, which is essential for successfully increasing the sales during the cold seasons of business. It is clear that the short-term promotion plan for the company should be designed in such a manner to effectively gain the customer attention and increase the sales in the target market.

Alongside, it was also established that the company's long-term promotion are not effectively reflecting upon establishing the brand image of the company and hence it was recommended to deploy the 'Communications model' to establish the long-term promotions and communication strategy in the market. It was also established that only by establishing itself as a strong brand in the existing target market segment, the company can successfully establish in the new market segments and hence it is essential for Thorntons to redefine both the long-term and short-term promotion strategies.

Finally, the analysis on the over 50 years segment o the consumers proved that the direct marketing method will be successful when strategically deployed along with the short-term promotion plans of the company so as to increase the sales.

The above statements make it evident that the research has achieved all the objectives stated in chapter 1.

Conclusion:

From the analyses in chapters 2 and 3 it is evident that the existing potential of the company, Thorntons Plc can be effectively deployed to increase the sales as well as gain competitive advantage in the market. It is also clear that the communication of the promotion and products is essential for a successful venture in any business. Hence to conclude the report, Thorntons Plc's existing marketing strategy should be redefined in order to reflect upon the customer demand and buyer behaviour so as to increase the sales in the existing target market as well as to enter new market segments with a strong brand image.

References:

Books

David Jobber, 2004, Principles and practice of marketing, Fourth Edition, UK: McGraw-Hill, 2004

Frances Brassington and Stephen Pettitt, (2003), Principles of Marketing, third edition, UK: Prentice Hall Financial Times

Philip Kotler, (1988), Marketing Management Analysis, Planning, Implementation and Control, Prentice Hall Inc, New Jersey.

Journals and Market Reports

Market Report, (2005), Market Report Plus: Confectionery, UK: Keynote Ltd

Ruth Mortimer, (2003), Cadbury's Purple Reign, UK: ABA Journal, Business Source Premier

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