Ferrero Case

INTRODUCTION

Ferrero is family-owned confectionery company which built by Pietro Ferrero in Alba, Italy. In 1940s, he transformed a small pastry shop into a factory. Pietro Ferrero opened his first production sites and offices in the confectionary sector after the World War II and his company went international (Ferrero, 2009). He opened the first company with 50 employees (Ferrero, 2010). The first success product of Ferrero was pasta gianduja block which suitably for consumer who liked sugary foods. After that, the company changed the product became cream. Now, the consumers know the product as nutella with sells over 67,000 jars annually in Italia itself (Kotler and Keller, 2012).

After Pietro Ferrero was died, his son took over the business. Michele Ferrero was a good leader for Ferrero company, because he had ambition to invent new innovation products and changed the consumers food habit. In 1963, Michele Ferrero changed the formula and marketed it. Now, Michele's son Giovanni Ferrero continues to run the business, he has good passion to get ambitious goals (Kotler and Keller, 2012). The best products of Ferrero company are Ferrero Rocher, Raffaello, Mon Chéri, Nutella, Kinder Surprise, Kinder Chocolate, Kinder Bueno, Kinder Pingui, and Tic Tac (Ferrero, 2009). The company always focus for the standard of product, therefore all ingredients of the products emphasize on premium quality. In 2009, Ferrero can reach 7.3 % of market of chocolate in the world and leading market in Western Europe with a 13.2% share. Ferrero has been over 21,000 employees in 18 factories worldwide. In 2010, Ferrero launched first online boutique in Australia which sell premium gifts (Kotler and Keller, 2012).

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

The decision to open an online boutique by Ferrero Australia is good decision and an appropriate marketing strategy. Because, Ferrero Australia can increase their channel management for the broader market in Australia. They can reach their consumers in Australia easily by accessing the

Ferrero boutique. Channel management is a way for company to delivery their products or service to consumers (Brown & Smith, 2004). It means how Ferrero Australia can promote, sell, and deliver the product to consumers by using their internet marketing strategy.

Beside use channel management, Ferrero Australia also use pull strategy to attract the consumer directly. Pull strategy is formed by consumer demand. It is a promotion strategy that is aim directly to consumers or end user (Rimlinger, 2011). They use this strategy to build up new relationship to consumer in Australia and interact directly with the end user.

Ferrero Boutique also can increases brand awareness of their product, especially all products which are sale in Ferrero Boutique. Brand awareness is ability to remember and realize a brand in memory of consumers. Brand Awareness is an important factor when the consumer will make decision to buy a product (Tsuji, 2007). The way to increase brand awareness of Ferrero with interesting advertisement of product and good design of Ferrero boutique which is updated by Ferrero Australia routinely.

In this case study, Ferrero Australian built online boutique, www.ferreroboutique.com.au, to expand new market in Australia. The strategy of marketing is quiet attractive, because they use internet marketing strategy as a media to promote the product. Internet and social networking sites are the way to augment and expand the business existence (Greenfield, 2009). Internet also has ability to reach all consumers 24 hours a day, 7 days per week and wide target market (Lombardi, 2010). Therefore, Consumer can access the online shop anytime and buy the product

directly in Ferrero Boutique. In 2011, the number of internet users in Oceania (South Pacific Islands, New Zealand, and Australia) reach 23,927,457 users (Miniwatts Marketing Group, 2012). This is a good opportunity and challenge for Ferrero Australia to increase their sales, especially with internet marketing.

Opening Ferrero boutique in Australia will not have impact for other business of Ferrero company. Because, the opening of Ferrero Boutique is to expand the new target market of company that previously exist in Australia. Market segment is targeting group of consumers who

have similar needs and wants (Kotler and Keller, 2006). Ferrero boutique has different target market, because they concern to use internet marketing strategy. The target market of Ferrero boutique are executive, corporate and consumer who wants give gifts for special occasions with premium product with range price $45 to $360.

Ferrero Boutique will not spoil the market of previous products of Ferrero Company as well. The reason that the products of Ferrero boutique is product line of Ferrero Rocher. Product line is the development of a product with a same platform and module that can be added to accommodate the differentiation of consumer requirements (Kotler and Keller, 2006). The product line which is sold by Ferrero boutique including traditional praline chocolate, such as the dark chocolate Ferrero Rondnoir, and the white chocolate Raffaello (Kotler and Keller, 2012).

The products which are sold by Ferrero boutiques are Grande Impressione, Medio, Hat Box Hampper, Grande, and Piccolo (Ferrero Boutique, 2012). All products sold by Ferrero boutiques have different characteristics according to needs and wants from consumers. The company makes good packaging for the product so it looks unique, luxurious, exclusive, and suitable for gifts with special occasions such as corporate gift, Birthdays, Baby Showers, Get Well Soon, and special events (Christmas, mother day, etc). Besides having some kinds of choice products offered, consumers also can choose the different boxes, wrapping, and gets personalised card with unique design, luxury, and exclusive from Ferrero boutiques (Ferrero Boutique, 2012).

Question 2: How can Ferrero use new technology to markets its products better?

New technology is a way for company to promote their products. Technology provides new tools of marketing, especially internet marketing. Ferrero can use technology as a media to promote the products. In this case, Ferrero use internet for their marketing strategy to reach market wider. Not only reach market target in Australia, but also use newer technology in order to improve market in the world, mainly in South American and Asian as well. They can use

some kinds of internet marketing to promote their product and maintain relationship