Team Members – Cherry Team

Hsuan-Wen Huang (Sharon)Julide HalilbeyogluMansi Patel

Table of Contents

Overview of The Company - Ghirardelli...................................................................................2

INTRODUCTION TO THE MARKET.............................................................................................3

New Product Decision.............................................................................................................4Primary Research.............................................................................................................................5

Observations........................................................................................................................................5Personal Interview...............................................................................................................................6Survey..................................................................................................................................................7

Current status of the product...........................................................................................................8New Product Description..................................................................................................................9

Target Audience....................................................................................................................11Current Target Audience.................................................................................................................11New Product Target Audience........................................................................................................11Persona..........................................................................................................................................12

Consumer Insights.................................................................................................................121. Brand Name...............................................................................................................................132. Innovation..................................................................................................................................133. Price..........................................................................................................................................134. Premium Brand..........................................................................................................................135. Easy to Prepare (Convenience)...................................................................................................146. Flavors.......................................................................................................................................147. Desire.........................................................................................................................................14The other consumer insight is about desire. Based on our primary research, we have found that when you provide sample for the customers, they would have desire to buy it. Furthermore, 81% of people like to mix chocolate with other food/drinks. If a store provides a sample of chocolate beverage that made by chocolate spoon, customers will likely to buy it and try it at home......................................148. Gift:...........................................................................................................................................15

Recommendation..................................................................................................................15

Bibliography..........................................................................................................................15

Appendix: A...........................................................................................................................17

Appendix : 2..........................................................................................................................20

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Overview of The Company – Ghirardelli

Centuries back Ghirardelli served as the Geno confectioner’s apprentice and showed a real strong interest in the business basically originated from Italy. Between 1852 and 1895 Ghirardelli’s Chocolate Factory was located at around 4 different sites before it was took over by the pioneer Woolen Milson the North Point Street, which now today is a Ghirardelli Square.

In 1960s the chocolate manufacturing operation was sold and transferred to San Leandro. A group of San Franciscans feared that Ghirardelli might be demolished purchased the property. They started establishing various shops and restaurant within the old factory, combining the latest in retailing and fine cuisine with the flavor of old San Francisco. Soon the owners applied and granted National Historic Register status, a move that endured the preservations of Ghirardelli Square for future generations. (Ghriardelli Square and history)

In the history of the Ghirardelli Company it was acquired by various companies like in 1963 it was bought by the Golden Grain Macaroni Company maker of Rice-A-Roni. Later Quaker oats bought it in 1986 and then Lint and Sprungli from Switzerland acquired Ghirardelli Chocolate Company in 1998 as a wholly owned subsidiary of it holding company. (Ghirardelli SanFrancisco since 1852)

Ghirardelli consider itself as the first American company to understand and tap in to the power of promotion. They are also among the few companies in America that controls the entire chocolate making process from the bean to the bar. Also the company has made its image in the market since centuries as the best high quality chocolates and a medium of gifting your loved ones. (Ghirardelli San Francisco since 1852)

INTRODUCTION TO THE MARKET

Consumer demand for chocolate is on the rise in all around the world. Global chocolate market was $83.2 billion in 2010 and based on the Chocolate Industry analysts conducted by M&M, global chocolate market will grow to $98.3 billion in 2016. Regionally, The U.S. leads the markets in North America with a market share of 86.3%. (M&M, 2011) Based on statista report, Ghirardelli is one of the leading chocolate companies in the US with a market share of about 4.8%. (2015)

U.S. Chocolate Industry

The NCA reports that retail sales of chocolate products reached $18 billion in 2010. According to NCA, annual sales have continued to increase from 3 to 4 percent per year. In 2010, the U.S. exports of chocolate to worldwide markets were estimated to be over $1 billion. The undisputed

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leader for North American sales of chocolate products, the U.S. has a market share estimated at over 86 percent.

Global Chocolate Market

Chocolate Industry analysts M&M predict the global chocolate market will experience annual sales of $98.3 billion by 2016 -- the result of an annual growth rate approaching 3 percent. Demand in Asia is a major source in the growth of sales, and is expected to rise to a 20 percent share in the global market by 2016.

Cocoa Production

Chocolate is a by-product of the cocoa bean. Over 50 percent of the cocoa harvested annually worldwide comes from West Africa. Most comes from Cote d'Ivoire -- Ivory Coast -- followed by Ghana, Nigeria and Cameroon. Other significant producers include Indonesia, Brazil and Ecuador.

Market Leaders

The largest manufacturers of chocolate in the world are annually ranked according to sales. The International Cocoa Organization lists the top producer as Kraft Foods, Inc. with net sales of nearly $20 million, followed by Mars, USA, Inc., and Nestle SA Switzerland.

New Product DecisionProduct description “Chocolate spoon”

The new product for Ghirardelli is called “chocolate spoon.” The chocolate spoon will look like a little square chocolate with spoon/stick on it. It will allow customers to have a more convenient and easier experience when enjoying a hot chocolate beverage. Customers just need to heat up any liquid that they want to mix with the chocolate and put the chocolate spoon into the heated liquid. Then, it is all set up.

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The initial product will only provide three different flavors, which are dark chocolate, milk chocolate, and caramel chocolate. The feature for this product will be five chocolate spoons in one pack. Each pack either contains with the same flavor or a mix flavors, and the price will be the same for every pack, which is $15 per pack.

The position for this product will be premium since this company provides premium chocolate in the market. In addition, we are going to sell the product through grocery/pharmacy stores, such as Safeway, Walgreens, CVS, etc., and the direct stores that Ghirardelli own.

Primary Research

For this project, we have used three important methods for our primary research, such as observation, personal interview, and survey, to gather the relevant information for consumer insight.

Observations

The observation that we have done is in the Ghirardelli store, which is located at Fisherman’s Wharf. The list below is the behavior from the customers that we have seen from the store:

Before ordering, customers discuss with each other. Most of the groups have at least one

opinion leader to give other people some relevant information.

Women make the final order decision more than men.

Most of the people there are tourists, including friends, families, and couples.

Most of the people ordered brownie chocolate sundaes and hot chocolate.

Customers prefer dining in more than take out.

After the meal, customers usually stay some time to see around what chocolate Ghirardelli

sells in store.

Not everyone makes a purchase after they have dessert in store.

Customers discuss about the dessert while they eat it.

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This observation leads us to come up with the idea for chocolate spoon. While observing, we heard people wonder how to make those desserts and whether they could make them at home.

Personal Interview

Managerial Interview

In the Ghirardelli store, we had an interview with a manager for around 20 minuets. The list below is the information that we have received from the manager.

Customers like to buy the largest mix flavor pack. It is the least expensive one.

Caramel is the flavor that people choose the most.

Almost everyone takes the sample when they walk into store.

Providing samples help them to see customer’s reaction to the chocolate and also encourage

customers to buy the flavor that they just tasted.

During the holiday season, the special package sells faster than other regular package design.

People ordered sundae and hot chocolate beverage the most.

Most people purchase something from the store after they have dessert there.

It is rare to see someone just walk in and leave without buying any chocolate.

The interview with the manager from Ghirardelli helps us understand that most of customers consider the product’s value, including how much they are willing to pay for each product. Customer InterviewTo understand more about consumer insight, we have done other 2 interviews. One is with a male and the other one is with a female. It helps us to understand the difference between male and female. The list below is from the interviews that we have done with both interviewees: Both of the interviewees like to eat chocolate at least one time per day.

There is no limitation of eating chocolate for male interviewee because he does not care how

much calorie that he has per day, as long as he is not over eating chocolates.

There is some limitations of eating chocolate for female interviewee because she does not

want to get fat. Moreover, she does not do much exercise. It means she keeps her body in the

right shape by controlling the food that she eats per day.

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Interviewees are from different countries, but they do not have different value for buying

chocolates. Both of them like to buy the flavor that they like the most when they go to the

brand that they have never tried before.

Both of them are willing to try new things, including new products, new flavors, and so on.

The male interviewee does not buy chocolate from same brand. He compares the price

between different brands.

The female interviewee buy chocolate from certain brand that she likes. She does not care

that much about price, as long as it tastes good.

Both of them like to drink chocolate beverages.

From the personal interviews with two different people of different genders and nationalities, we have found that in the chocolate category there is no differences on cultures, ethnic, or nationality. However, gender differences might be only reason to make people have different insight and different behavior. For example, in this interview, male interviewee does not have brand loyalty, and he does not care how much chocolate he eats per day. Also, he tends to be a price sensitive person. On the other hand, the female interviewee has brand loyalty, and she cares about how much chocolate she eats per day. However, she is not a price sensitive person.

Survey

We created a survey by using Qualtrics survey software. The survey has launched online for a week. The total number for people who completed this survey is 27 respondents. The age group from the survey is from under 21 (4%), 22-31 (78%), 32-41 (11%), and 42-51 or above (7%). Moreover, all of them know the brand Ghirardelli and have certain experiences with this brand, such as having dessert at the store and buying or receiving the chocolate. The list below is the result that we have found out from the survey:

More than half (52%) of respondents eat chocolate once per week.

Dark chocolate is the one that most respondents preferred. The second ranking is milk

chocolate.

Respondents choose Godiva more than Ghirardelli.

81% of respondents prefer to mix chocolate with other food, such as milk, bread, or cookies.

More than half of respondents do not have hot chocolate beverage from Ghirardelli.

More than half of respondents like to make chocolate beverage at home.

67% of respondents are willing to try chocolate spoon from Ghirardelli.

$15 is the price that respondents prefer the most for a pack of chocolate spoons.

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17 respondents like to mix chocolate with other food and are also willing to try new products

from Ghirardelli.

Females are more likely to try new products than males

The survey questions that we used are very simple, it took less than 3 minutes for 95% of respondents to complete the survey. Even though the questions are simple, we still gathered enough and relevant information from this survey.

Current status of the product.

Product

Ghirardelli produces a wide range of chocolate products with different flavors. Their main products are:

Chocolate Squares- This squares consist of different flavors and can be either purchase individually or in premade packages.

Chocolate Bars- Large Bars of chocolates come in in smaller variety but are of the same quality with different packaging pattern.

Backing Products- Include chocolate chips, Brownie mix, Baking chocolate and desert sauces.

Hot Beverages- Including Hot chocolate, Frappes and Mochas.

Pricing

Ghirardelli signature squares can be bought for just $1, while the deluxe baskets starts from $200 onwards. There is also some range of products between these values with their bars usually retailing at around $4 and their beverage around $5.The Hot chocolate beverage starts with $4 and then an extra dollar for any extra topping.

PlaceGhirardelli has a couple of stores were they just sell chocolates while there are certain stores were they also sell chocolates as well as they have a special café for the beverages and deserts. Also the company has various tie ups with Wal-Mart, target, Safeway; Walgreens etc. where they sell their huge amount of different package of chocolates. Ghirardelli Square

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near Fisherman’s Warf is the oldest and biggest store of Ghirardelli chocolates and the cafeteria with many options.

Promotion

Ghirardelli make some promotion through television, websites social media such as Facebook, snap chat etc. they also offer a trail chocolate in the store when anybody enters in to the store every day.

Positioning

As per few of the researches and the various reports it is stated that Ghirardelli has been positioned as the Americas Premium Chocolate Company. The people and Ghirardelli employee also states that Ghirardelli is one is one if the high quality premium chocolate and not the luxurious chocolates. Also it is not just famous for chocolates but also for the beverages.

New Product Description

Product

The new product which planned to launch is the hot chocolate spoon. This product is an innovative and relative product. We go to know that people love hot chocolate of Ghirardelli and through our primary research we also came to know they like to mix chocolate with milk and make it at home. We suggested that plan of chocolate spoon were it is just dipped in the hot milk and the taste is the same like Ghirardelli Hot chocolate. This Product concept is very new in the market and no big companies like Lint, Hershey’s etc. have tried this. This Product will be available with 3 flavors dark chocolate, caramel and milk chocolate spoon. In other outlet stores it would be available in 5 piece packages while in the Ghirardelli store the customer can purchase individual pieces.

PriceThe Price of each chocolate spoon is 3$ which is $1 less than the hot chocolate offered in the café of Ghirardelli. The reason for keeping the price at 3$ is because they don’t need to come to the cafe for the chocolate and on the other side we conducted a primary research and we ask the potential customer that what price they would be accepting and willing to try this product within the range 15 to 30$ for 5 pieces and we got the answer as 15$. Also it’s a new product and the big brand is associated with it so this price is a suitable idea.

Place The new product chocolate spoon will be available at all the Ghirardelli chocolate stores and also the café. The other places are the souvenir stores, Wal-Mart, Costco, Target, Walgreens, and Safeway etc.

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Promotion This product is new in the market and nobody knows about it so a high-end promotion would be adopted.

Events:Ghirardelli chocolates are always famous for the event which they conduct every year so the company would promote is new product in those events. The events like chocolate day conducted by the company for the chocolate companies is also a great medium to enter in the market with much more awareness.For example during the dark night chocolate hour the company created a special tasting of new flavor chocolates and they had a great idea on what the people perceive but on the other hand they also created a big sale. So the trial can be done during that time.

Social MediaA lot of target audience can be easily obtain online on the social media website like Facebook, twitter, instagram, snap chat etc. people can post there experience and celebration of the new product by the insta pic and various snap stories. This medium is more effective because people trust other people rather than companies and also they can share their experience, idea and opinions.

Tourism companiesHaving known that the major target of the company is tourist it would be great if the Ghirardelli tie up with hop on and Hop of company who have various tourist bus all over the city. The tourism map of San Francisco also includes Ghirardelli square so what the company can do is give a spoon size small coupon to the tourist and ask them to show at the Ghirardelli Square were they will be given a chocolate spoon sample which they can try anytime.

PositioningThe chocolate spoon will be positioned as an innovative product, which is new in the market with various features like the same taste, easy to make, Convenience and also matching the standard of the companies.

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Target Audience

Current Target Audience

As we know the company is well known for its premium chocolates it has a high number of refined customers. The main customers are the adults and not the children. The stores of the Ghirardelli are set up in a café style atmosphere, which encourages the customer to cone and spend some time.

Tourists- Ghirardelli as being the oldest company of chocolates establishes in San Francisco is a tourist attraction and a part of San Francisco gift. People know about the company and its chocolate before they enter in San Francisco.

Professionals: Due to the café style atmosphere and beautiful ambience people like to have their meeting and leisure time there.

Couples: the premium chocolates are a way of gesture of beautiful gifts to the loved ones. The Ghirardelli company have various packaging for the different festivals and also for the gifts like beautiful baskets.

New Product Target Audience

The target audience of the Ghirardelli Company would be the same. But with this concept of Chocolate spoon the company will be also able to target on the convenience of people and that would include more target people.

Demographics: The main target audience for the hot chocolate spoon would be the adults who like to have beverages and don’t have time to stop by at the Ghirardelli square daily. Also the tourist who are visiting to San Francisco and would like to take creative gift for there loved ones.

Psychographics: People who prefer the high quality premium brand and like to have same type of taste as they have in the Ghirardelli café. Also the people who would be most connected with this product will be working people who don’t get time to make or cook.

Geography: In the initial period we would like to set up this product only in the San Francisco and then there would be expansion in the various cities and states. Also the

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chocolate spoon will be accessible in all big super markets and all the stores of Ghirardelli and also the souvenir stores.

Behavioral Characteristics: This is a very new product in San Francisco and very less people are aware about this product, So due to this reason the main target audience would be the Innovators who would like to try new products and also Loyal customers who have been loyal to the company for a long period of time they would also like to try the new product which is in the market.

Persona

Persona #1

- Jessica

- Age: 32

- Occupation: office worker, married, have two kids

- Income: 75,000

- Profile: Jessica is a workingwoman. She needs to prepare food for her husband and kids every day. She feels that cooking or make snacks take lots of time from her. Her kids usually need to have something to eat/drink when they get home, and all of them are chocolate lover.

Persona #2

- Michael

- Age: 28

- Occupation: office worker, single

- Income: 100,000

- Profile: Michael is a office worker, he is very busy at work every day. So, his busy life makes him like to use convenient products, such as eating microwaved food. He likes chocolate. It keeps his energy up and feels happy. Also, he drinks milk in the morning/before go to sleep at least once a day. He likes to meet friend in café, and likes to choose chocolate product as a gift for friends.

Consumer Insights

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1. Brand Name

Based on the survey that our team conducted, all the responders answered that they are familiar with the Ghirardelli brand. Respondents were asked whether they have had any hot chocolate in one of the Ghirardelli stores or not and, 48% of the respondents answered they had and they stated that the hot chocolate they bought from the market which is Ghirardelli hot chocolate powder tastes not as good as the one Ghirardelli serves in their store, so they noted that they would love to try the new hot chocolate spoons since the spoon will look and taste consistent everywhere.

2. Innovation

The hot chocolate spoon will be the same in stores and in the market, so people will not experience unpleasant surprises when they purchase it. Ghirardelli is a premium and established brand, so both the loyal customers and the new customers would like to try this new product. Moreover, hot chocolate spoon is a perfect fit for the American culture as well, since people are so busy with the work, they may not have time to go to store, they can buy hot chocolate spoon from the markets and they can get the same taste as they would if they were having the spoon in store. Based on the survey results, 69% of the people would like to try this new product.

3. Price

The hot chocolate at the Ghirardelli café is 4$ while the chocolate spoon will be 3$. This will be on eof the reason which will motivate the customer to purchase the hot chocolate. Also at less price they would be able to enjoy the same taste and same quality of hot chocolate at home with a less price.

Ghirardelli has consumer who love the company because of its premium quality and standards, which is the reason why people would be ready to pay the amount and try this new product. The company in this prize is also offering 3 flavors, which is not a bad option. The 5 piece pack of the chocolate spoon will cost around 15$ to the customers. Also in our primary research we ask the respondents from 15$ to 30$ which price they would select in order to get these new product of Ghirardelli and we got the reply that they would like to see the product of 5 packages at 15$ and the same answer was given by 70% of respondents which is really huge in number.

4. Premium Brand

Ghirardelli Chocolate Company has a history of 160 years that itself is a big brand. People in America know Ghirardelli as a premium quality chocolate company. People know about Ghirardelli before even coming to San Francisco and they make sure they take these chocolates as a gift for the people who are away.

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As per the survey we took 25 respondents and all of them are aware about the company and its chocolates. So because of the name there would be lot of people who are interested to taste this new product and they know that the company would not compromise in there quality and standards so this is also a perception which will lead to trial of the new product which is the Hot chocolate Spoon.

5. Easy to Prepare (Convenience)

People like to have something easy to use or easy to make since their lives are very busy. Based on the primary research, we have found that 54% of people like to eat chocolate once a week. Also, most people are busy for their life, whether work or school. Therefore, the chocolate spoon is a product that is easy to make.

To apply this consumer insight to the marketing plan, Ghirardelli could have made in store demo or make short video to show people how easy and fast it is to prepare a chocolate beverage.

6. Flavors

Another consumer insight is about flavors. Based on our primary research, we have found that 42% of people like to eat dark chocolate, 35% of people like to eat milk chocolate, and 12% of people like to eat white chocolate. From the observation and interview, caramel is the flavor that most people purchase. It means that flavor diversity in Ghirardelli is important to attract people to buy it.

To apply this consumer insight to the marketing plan, Ghirardelli could provide more special flavors in holiday season, or let customers create their own chocolate spoon’s flavor.

7. Desire

The other consumer insight is about desire. Based on our primary research, we have found that when you provide sample for the customers, they would have desire to buy it. Furthermore, 81% of people like to mix chocolate with other food/drinks. If a store provides a sample of chocolate beverage that made by chocolate spoon, customers will likely to buy it and try it at home.

8. Gift:

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A study has told that the people who purchase the Ghirardelli Products are not the actual consumer of that product and so it is a symbol and prestige of gift and also a souvenir for the tourist. The company makes sure they have beautiful packaging and themes for the holidays and festivals. They have special San Francisco Trams for the tourist which is filled with chocolates and this is how they differentiate from there other competitors.

So the same thing they can do for the Chocolate spoon and this will also be a special gift to the people for the special events.

Recommendation

Having studied Ghirardelli`s current customers, their buying habits, behaviors and their insights, me and my team highly recommend this new product. The primary research that we conducted, gave us information about our target market and position in the market and also, the secondary research helped us to understand that this new product would be unique in the market. Based on our findings, we want to launch chocolate spoon product, in order to be unique in the untapped market.

BibliographyGhirardelli. (2015). Ghirardelli San Francisco since 1852. (Ghirardelli Company) Retrieved 2015, from www.ghirardelli.com: http://www.ghirardelli.com/our-story

Ghirardelli. (2014). Ghriardelli Square and history. (Ghirardelli) Retrieved 2015, from www.ghirardellisq.com: http://www.ghirardellisq.com/explore/history/

MarketandMarkets (M&M). ( May,4 2011) “Global Chocolate, Cocoa Beans, Lecithin, Sugar and Vanilla Market by Market Share, Trade, Prices, Geography Trend and Forecasts (2011-2016)” Retrieved from http://www.candyindustry.com/articles/83849-global-chocolate-market-worth-98-3-billion-by-2016

Market share of the leading chocolate companies in the United States in 2014. (2015). Retrieve from http://www.statista.com/statistics/238794/market-share-of-the-leading-chocolate-companies-in-the-us/

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Appendix: A1. Do you know Ghirardelli?

o Yes

o No

2. What is your gender?

o Male

o Female

3. What is the best to describe your age?

o Under 21

o 22-31

o 32-41

o 42-51

o 52 and above

4. How often do you eat chocolate?

o Never

o Once or more per day

o Once in two days

o Once per week

o Twice per week

o More than 2 times a week

5. What kind of chocolate flavor you like the most?

o Dark chocolate

o Milk chocolate

o White chocolate

o With caramel

o With nuts

o With fruit

6. Which chocolate brand you like the most?

o Ghirardelli

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o Godiva

o M&M’s

o Harshey’s

o Reese’s

o Others, please name it _______________

7. Would you like to mix chocolate with other food/drink, such as milk, bread, cookies, and so on?

o Yes

o No

8. Continue the previous question. If yes, what kind of food/drink would you like to mix with chocolate?

o Milk

o Bread

o Cookies

o Others, please name it _______________

9. Have you ever had hot chocolate beverage from Ghirardelli?

o Yes

o No

10. Have you ever had hot chocolate beverage from other brands beside Ghirardelli?

o Yes, please name it one brand that you like the most. _______________

o No

11. How are you willing to pay for making own hot chocolate beverage at home? (1= not willingness, 5=highly willingness)

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12. Does anyone you know who likes to have self-made hot chocolate beverage at home?

o Yes

o No

13. If there were a new product from Ghirardelli is called “chocolate spoon,” would you interested in?

o Yes

o No

14. Continue the previous question, how much would you like to pay for a pack from $15 to $25? (Each pack contain 5 chocolate spoons)

o __________________

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Appendix : 2SWOT ANALYSIS

STRENGTHS OPPORTUNITIES WEAKNESSES THREATS

High brand recognition Hot chocolate market

has a similar potential

as the coffee market

Primarily focused on

the product, not the

experience

Competitors have

already have control

over the majority of the

hot beverage in the

market

Credibility of the brand Weather in San Fran is

‘cool’ for most of the

year

Mainly known with

chocolates and ice-

creams

Hot chocolate can be

hard to sell in summer

times

Appeals to both local

people and tourists

San Francisco

welcomes tourists all

of the time

Lack of marketing of

hot chocolate

Stores are in good

strategic location

Chocolate spoon is

unique in the market

Expertise in art of

chocolate making

High demand for hot

chocolate

Untapped market

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