Ferrero Case Study

Case Study Analysis

Company Background

Ferrero is an Italian Confectionary company, privately owned by Ferrero started in 1946 with a small patisserie in Alba, Italy. It was lauded as the most reputable company in the world in 2009. It holds 7.3% world's market share. And in western Europe with a 13.2% market share. In 1974, Ferrero established operations in Australia with the mission of delighting customers with unique products of the highest quality and intergrity and contributing to the well being of employees, customers and the company. Ferrero's focus on consumers is accompanied by its emphasis on quality, integrity, product innovation and passion. It comprises the high quality products series such as Nutella, Tic Tac, Ferrero Chocolates, Kinder and Kinder Bueno in local market and New Zealand, with the mission to "delight customers with unique product experiences of the highest quality and integrity."

Question 1: Evaluate Ferrero Australia's decision to open an online boutique. Will this have any impact on the company's other business segments?

With the rapid development of economy, more and more people use the online tools, such as laptop, mobile phone, iPad which could conveniently access to the interrnet. Without any doubt, with this rapid growth, online shopping will become a trend even a habit for future society. Influenced by this trend, those traditional retailers and manufactures have to design and develop new path to build beneficial relationships with target consumers to ensure the improvement of the market share. Hence, Ferrero has made the right decision to open the online boutique.

Ferrero's online boutique establishes a platform which focus on luxury，exclusive Limited Edition, corporate collections with fixed price, attractive packing and prompt delivery service to satisfy customers' specific needs and promote company images. According to Laurent Freixe, head of Nestle's European business, there are demands on luxury products even in recession time (Doherty, 2012). The study shows that the global premium chocolate market is predicted to achieve a value of US$12.9bn by the year of 2011 ( researchandmarket, 2008). As an informed player in the market, Ferrero Australia did lots of tests on its products in local market and also started to use media strategies in earlier stage for understanding customer preference(Kotler & Keller). Online boutique is designed especially for those people who pursue high quality life and are also ideal consumers to Ferrero. Online boutique's exclusive products, elegant packing and even a personal card are fulfill with classic, love, care to attract people and satisfy their expectations and thus build a strong brand equity for Ferrero.

Ferrero's online boutique offers fantastic opportunities of multichannel, interactive communications between the company and their customers. It involves a large number of customers who use Facebook and boutique delivery system, hearing their concerns, resolving the problems, empowering them and engaging them in more activities (Kotler & Keller, 2012 ) "Customers do not care what you know until they know you care". ( Maloney & Boulay, 2008) Based upon an individual's present value and their expectations, Ferrero is trying every possibility to deliver consistently superior services to obtain a long-term relationship with their customers. People are influenced by a number of positive posts about the products, brand, activities, creative ideas on Facebook, and they engaged themselves actively in the community not only as a consumer, but a member of this family. Greater customer loyalty to Ferrero formed gradually by interactive communication, hence build a positive corporate image and stronger customer relationship to increase revenues and obtain more market share.

Online boutique sells a range of premium gifts priced from $45 to $360 and gift boxes for special occasions. Those gift boxes contain chocolates from Ferrero Rochor line.Ferrero's decision to go online will have positive effects on other business segments. Old customers will prefer to place online orders. Ferrero can launch online products of other segments as well and can reduce marketing cost. Brand awareness of other business segments will be getting strong with online store.

Online store is the fastest communication tool to reach the customer enjoying Ferrero delicacies. Online store will fulfill the desire of customers to enjoy all segments of products without any compromise. Customer can place orders online and get easily shipment at the door. Online stores are available 24/7 which will give customers satifaction to place order at any time. Other segments of ferrero can also be ordered and can reach customers in less time.

Through online store other segments product or ferrero chocolates can be