uic rCardiff's metropolitan university prifysgol metropolitan Caerdydd

UNIVERSITY OF WALES INSTITUTE, CARDIFF Cardiff School of Management MBA

"The standardisation and adaptation of chocolate confectionery. Nestle S.A.: a Case Study"

Submitted in September 2008 By

Sophie Beresford(Student Number: ST 07000640)

Project Supervisor: Dr. Gareth JonesThis dissertation is being submitted in partial fulfilment of the requirements for the degree of Master of Business Administration (MBA).

his work has not pre moor Le er, submitted in candidature for any

STATEMENT 1 This dissertation IS heron :(obrIlltiN, ire;;h-

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o_otrir ,:tr(ents for the degree of MLA etc as appropriate)

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STATEMENT Thi s dis redahop i t t he Ot her s o u r c e sareIt'',

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STATEMENT 3

my dissertation, if accepted to be available 101 photocopying and for inter-library loan, and for the title and summary to be made Ee.nirahre lo ou

(candidate)

N B : C andi d at e s on w hos e b e h a l f a b a r o n t k t r be en a p pr o v ed by t he Un i ve r s i t y (s ee A pp en di x 2) , sh o ul duse (he followuto version? of .;tatertient 3

le for photocopying and for inter-library l o a ns a f t e r e x p i r y o f a ba r o n a c c e s s a pp r o v e d b y t h e U n i v e r s i t y o f Wa l e s o n t h e s pe c i a l r e c o m m e

(candidate)

Supervisor Declaration FormStudent Name Supervisor's Name

Son-t- 'S zy ) u %a n R c_m

he planned meetings and actively engaged in the dissertation supervision process. They have provided reg

v

ACKNOWLEDGEMENTS

e to sincerely thank my supervisor, Dr Gareth Jones, for his guidance and support.

ank Dr John Gunson for providing me with relevant material.

e and love goes to my parents Sylvie and Anthony and to my brother Alex, for their love, belief in me, an

ank Beth Stoneham and Maximilian Scharonow for their contributions to the primary data collection.

v

tent to which Nestle S.A. is standardising its products and examines the variation in consumer taste fr

d of globalisation, consumer needs are converging, particularly in Europe. Time and cost constraints lim

n. Secondary research highlights the differences between the markets studied and suggests that consume

vi

TABLE OF CONTENTS

Student Declaration Supervisor Declaration Acknowledgements Abstract Table of ContentsINTRODUCTION CHAPTER 1 List of Tables and Figures1 1.1 Purpose of the Study1 1.2 Statement of the Problem 1 1.3 Research Aims 4 1.4 Research Objectives 4 1.5 Structure of the Study 5 1.6 Hypotheses .6

ii iii

iv vi

CHAPTER 2 LITERATURE REVIEW 8 2.1 Introduction 8 2.2 Marketing Strategy8 2.2.1 The Marketing Mix 8 2.2.2 Strategic Options available to the Firm 10 2.3 Global Integration 11 2.3.1 Globalisation 11 2.3.2 Convergence 12 2.4 Standardisation versus Adaptation 13 2.4.1 Standardisation 13 2.4.2 Adaptation 14 2.4.3 Changes over Time 14 2.4.4 Product-related Choice 15 2.4.5 `Global' Strategy .16

viii 2.5 Culture as a Driver of Local Responsiveness 16 2.5.1 Culture 17 2.5.2 Cultural Paradigm 17 2.5.3 Consumer Behaviour Theory 18 2.5.4 Cultural Impacts upon the Food Industry 19 2.5.5 Theoretical Framework 20 2.6 Summary 22CHAPTER 3 BACKGROUND RESEARCH 23

.

3.1 Introduction 3.2 The Chocolate Industry 3.2.1 The European Market 3.2.2 The UK Market 23 23 25 26 3.2.3 The German Market 3.2.4 The French Market 29 29 3.2.5 Cross-Country Comparison 30 3.3 Nestle S.A 33 3.4 Summary 34CHAPTER 4 RESEARCH METHODOLOGY 35

4.1 Introduction 4.2 Research Philosophy 4.3 Research Design 35 35 37 4.3.1 Forms of Research Design 38 4.3.2 Time Horizons 4.4 Data Collection 4.4.1 Sources of Data 4.4.2 Data Collection Methods 4.4.3 Sampling Procedures 4.5 Research in Action 40 40 40 41 42 45

4.6.1 Research Ethics 4.6.2 Reliability

48 48

viii

48 4.6.3 Validity and Generalisability 49

CHAPTER 5 RESEARCH FINDINGS AND DATA ANALYSIS

51

5.1 Review of Research Objectives 5.2 Questionnaire Findings 5.2.1 Is White Chocolate more popular in the UK than in France'? 5.2.2 Is Dark Chocolate the most popular choice in France'? 5.2.4 Popularity of Local Brands 5.2.5 Demographics and Consumer Choice 5.2.6 Qualitative Data Findings 5.3 Standardisation and Adaptation 5.3.1 The Adaptation of Nestle Products 5.3.2 Findings from Chocolate Tasting Session 5.4 Summary 5.5 Interpretation 5.5.1 Have Consumer Needs converged9 5 . 5 . 2 I s S t a n d a r d i s a t i o n

. 51 .. 52 52 54 .57 60 62 64 .64 71 .74 74 74 a p p a r e n t ' ?77

5.2.3 Do the French and Germans consume mainly Boxed Chocolate'?55

7 6 77 .. 77 77 79 79 80 81 81 82

CHAPTER 6 CONCLUSIONS AND RECOMMENDATIONS

6.1 Introduction 6.2 Findings 6.2.1 Results 6.2.2 Implications for Theory 6.2.3 Implications for Management Practise 6.3 Limitations 6.4 Recommendations 6.4.1 Predictions of Future Trends 6.4.2 Recommendations for Future Research

BIBLIOGRAPHY

85

APPENDICES

91

Appendix I: Questionnaire Appendix II: Chocolate Tasting

91 97

ix

Appendix III: Brands consumed by the Respondents Appendix IV: Popularity of Local Brands Appendix V: Nutritional Values of Nestle Brands

.103 105 106

LIST OF TABLES AND FIGURES

TABLES

3.1 Top Ten Global Chocolate Confectionery Companies by Sales Revenue in 2005 3.2 Predicted Chocolate Consumption per capita, by Volume, 2008 26 5.1 Breakdown of the Respondents in terms of Age and Gender .52 5.2 Did Volunteers prefer a) the British adaptation or b) the German adaptation?FIGURES

24

72

1.1 The Swiss and British Origins of Chocolate marketed by Nestle, Kraft, Lindt and Cadbury 2.1 Model of Affection-related Chocolate Choice (MARCC) 21 31 3

3.1 European Chocolate Confectionery Market Segmentation, by volume, 2003 25 3.2 Chocolate Confectionery Market Shares in the United Kingdom, 2001 3.3 Chocolate Confectionery Market Shares in Germany, 2001 3.4 Chocolate Confectionery Market Shares in France, 2001 4.1 The Research 'Onion' 5.1 Chocolate Preference of British Respondents" 32 32 36 53 53 54

5.2 Origin of respondents preferring white chocolate to milk or dark chocolate 5.4 Chocolate Preference of French Respondents 54

5.3 Origin of respondents preferring dark chocolate over white and milk chocolate 5.5 Frequency of chocolate purchase by form, German respondents 55 5.6 Frequency of chocolate purchase by form, French respondents .56 5.7 Frequency of chocolate purchase by form, British respondents forms of chocolate at least once a week 5.9 Percentage of British, French and German respondents consuming particular Nestle brands 5.10 'Which is your favourite chocolate confectionery company?' - results from the British respondents 59 58 56 .57 5.8 Percentage of German, French and British respondents buying particular

xi

5.11 'Which is your favourite chocolate confectionery company?' - results from the German respondents 5.12 'Which is your favourite chocolate confectionery company?' - results from the French respondents 5.13 Chocolate preference by age 59

60

.61 5.14 Percentage of respondents consuming organic or fair-trade chocolate 62 5.15 Nutritional values (per 100g) of Smarties produced in the UK and in German . 66

100g) of AfterEight produced in the UK and in Germany...... 67 5.17 Nutritional values (per 100g) o ..70 70 71

100g) of KitKat 4-Finger Dark produced in the

100g) of KitKat Chunky produced in the

CHAPTER 1 INTRODUCTION

CHAPTER 1: INTRODUCTION 1.1 Purpose of the Study

around the marketing strategy of Nestle S.A. regarding the standardisation and adaptation of chocol

1.2 Statement of the Problem

eved that over time, these differences translated into distinct national tastes (Brenner, 1999). In Americ

1973 until 2000. Containing

up to 5% vegetable fat, British chocolate produced by the likes of Cadbur

dened its product

range. Chocolate production at Nestle began in 1905 (Heer, 1966, p.106) and

Figure 1.1: The Swiss and British origins of Chocolate marketed by Nestle, Kraft,

Lindt and Cadbury

Nestle takeover of Rowntree

Kraft takeover of Jacobs Suchard Jacobs Suchard

Rowntree Mackintosh Ltd MERGER Nestle S.A. takeover of Peter, Kohler, Cailler

MERGE

Lindt & Sprungli MERGER Nestle

950 1940 1930 1920 1910 1900 1890 1880 1870 1860 1850 1840 1830 1820 1810 Peter, Kohler, Cailler MERGER Mackintosh Peter Lindt Tobler Rowntree Chocolat Sprtingli A.G. Kohler Cailler Cadbury Suchard

Switzerland Great Britain America

e marketed its famous Kit Kat chocolate bar in the United States. However, it was feared that the American mar

e joined forces with Hershey so that the Kit Kat could be adapted to American tastes. The launch was succes

1.3 Research Aims

he literature about consumer buying behaviour, the effectiveness of standardisation and adaptation st

The following questions will be addressed:

should a chocolate manufacturer standardise its product, or adapt country by country according to

use the world to become a global market, implying similar tastes irrespective of region or country, or will

1.4 Research Objectives

ns outlined above, the problem can be broken down into specific objectives:

nk between globalisation and convergence and investigate the impact that globalisation might have upon

keting of chocolate; specifically, discuss whether there is a greater tendency to standardise now than be

strategy employed by Nestle S.A. with regards standardisation and adaptation.

evel of success in various countries of different Nestle brands, each of which has its own standardisati

or not national tastes exist.

will be collected to tackle the problem directly and answer specific questions, such as the extent to which

1.5 Structure of the Study

six chapters, each of which builds upon the previous chapter and takes the researcher closer to answerin

he dissertation. The need to standardise or adapt is set into context - the decision forms part of the form

s are analysed and secondary data is displayed, relating to the sales of chocolate and to the segmentatio

e communicated. Descriptive exploratory research was selected, and qualitative as well as quant

preferences and buying patterns in France, Germany and the United Kingdom is presented. The

nd Recommendations

d, the extent to which the findings answer the research question is discussed and recommendation

1.6 Hypotheses

analyse how the behaviour might differ from one country to the next. The following statements ar

s a luxury product and buy boxed chocolate

H5 - Brands are adapted to local tastes H6 - Britons prefer sweeter chocolate

e more similar, then consumer needs might be converging, and it can be argued that globalisation i

CHAPTER 2 LITERATURE REVIEW

CHAPTER 2: LITERATURE REVIEW 2.1 Introduction

et characteristics. It is therefore only feasible under certain conditions. The added value of adaptation, o

rand is marketed with the same marketing programmes in different countries; that is, the marketing mix

`The marketing mix is a conceptual framework that highlights the principal decisions marketing managers must make in tailoring their output to customers' needs' (Palmer

Bitner's extensions; People, Physical Aspects, Process (Groucult, 2005). Together, McCarthy's 4Ps a

ght be forced to adapt the product for each market. This is explored in more detail in section 2.4.

e new market.

the target market, which must be identified in each country, so that the effective promotional techn

kota & Ronkainen, 2007). In some countries, it might be common to buy products such as DVDs in

006, Wal-Mart pulled out of Germany; its marketing strategy had been unsuccessful. The main rea

Familiar logos, for instance, can help build customer awareness and loyalty and encourage cus

standards vary from one culture to the next. It might not be possible, therefore, to deliver the product or

et in which it operates. It is not clear, however, to what extent adaptation and standardisation are applie

ly better than those provided by competitors, particularly local competitors (Doole & Lowe, 2004). This o

y, as companies are relentlessly merging and industries are consolidating. Certain authors predict the

which might involve a certain degree of adaptation.

must spot regional differences and differentiate their marketing strategy accordingly. Japanese ca

ts around the world. The main aim is to build three strategic capabilities: global scale efficiency and com

2.3 Global Integration2.3.1 Globalisation

balisation lies at the core of the formation of a global market (Croucher, 2004). While some authors obse

onsumption homogenization. De Mooij (2004) suggested that consumers in every corner of the globe w

of companies. The index is the average of three

ratios: the ratio of companies' foreign assets to total as

ill be examined more closely in section 2.5.

nd Japan, firms standardising their products have been more successful in achieving a competitive adva

suit their home country. Evidence of the limitations of a standardised approach include Wal-Mart'

y. Levitt believed the world would become a common marketplace in which people in different cou

ht prefer localised, customised products, even if the world economy is driving us towards globalis

an countries (Fold, 2001). Large brand manufacturers standardised the marketing mix in order to benefi

'What we eat is strongly influenced by our culture' (Keegan, 1999, p.129). This statement is backed up

s a non-durable consumer good. This suggests that industrial or technology-intensive products have a ve

cognition.

er of products which incorporate regional differences into one basic design; adaptability is built into a

oday's markets. While political and legal restrictions upon the global market might be diminishing, th

several different layers: a national level, which might determine our basic cultural assumptions;

ues become manifest and are reflected in the choices of products and brands. That is, as their wea

hange. De Mooij (2004) suggested that at some point in time, ownership across countries reache

Dutch will buy more luxurious caravans and holiday trailers, and the Spanish will eat out even more t

of the consumer and not as an environmental factor.

meras (Kotler, 2000). In the car industry, attempts to standardise have been made by manufac

the researcher has shown that German and Spanish shopping habits are similar to Japanese o

markets therefore contain counters with fresh food which people can see and touch. In individua

eetness. Consumers oriented to particularly sweet chocolate can be separated from those who prefe

Figure 2.1: Model of Affection-Related Chocolate Choice (MARCC)

Source: Januszewska & Viaene, 2000, p.9

d preference as two separate factors might be over-simplistic. In chapter one, speculation was made abo

chocolate which is bitter rather than sweet. Equally, females might be more conscious about their weight

2.6 Summary

ent markets, and will thus choose to incorporate adaptation into the marketing mix. Europe gives rise to

CHAPTER 3 BACKGROUND RESEARCH

ll success in these three markets is found to be Nestle S.A.

ate: chocolate which is sold in boxes and might be classified as premium or luxury, e.g. Quality StreeDatamonitor (2004) predicted that the global chocolate market would experience increasing growth rates and reach a value of $51.5 billion by 2008. The top ten companies, in terms of sales in the year 2005, are presented in figure 3.1. Between

nary). Perhaps the reason for this success has been a successful adaptation to the market. In fact, 'We prod

Company Mars Total Sales 2005 Inc US$millions Cadbury Schweppes PLC Nestle SA Ferrero SpA Hershey Foods Corp. Kraft Foods Inc. Meiji Seika Kaisha Ltd. Lindt & Sprungli Barry Callebaut AG Ezaki Glico Co

9,546 8,126 7,973 5,580 4,881 2,250 1,693 1,673 1,427 1,239

Source: Candy Industry, January 2006, from

04, Chocolate Confectionery in Europe). Due to the clear

importance of the United Kingdom, Germany an

n

n

United Kingdom

France 0 Germany 00ther EU countries

Country Volume of chocolate consumed (million kg) in 2003 United Kingdom 684.6 France 402.1 Germany 391 Other European countries 1312.3

ate was

2.1%. In Germany, however, sales volume fell by 1.3% between 1999 and 2003. The

French

ld be consumed in 2008. These figures have been used to form an estimate of the chocolate consu

Table 3.2: Predicted Chocolate Consumption per Captia, by Volume, 2008Volume of chocolate consumed (million kg) in 2008 (estimates) Population in 2008 (estimates) Chocolate consumption per capita (kg) United Kingdom 743.8 60,943,912 12.2 France 417.4 64,057,790 6.5 Germany 396.9 Source: own diagram, data obtained from Datamonitor (2004) and Web 9 82,369,548 4.8

Country

3.2.2 The UK Market

lled chocolate rather than solid blocks. Meek found the best-selling chocolates in the United Kingd

adbury produces a wide range of chocolates in the form of bars, blocks, bagged products, rolls, box

is well-known for its Snickers, Milky Way, Galaxy, M & M's and Maltesters, as well as for its leadin

ries to restrict the amount of UK chocolate on the market, a restriction later declared illegal by the

White Chocolate

Some might believe that countries such as the UK, which have a reputation for consuming chocolate with added ingredients and fillings, might be more inclined towards white chocolate than, say, French and Spanish dark chocolate consumers.

actually marketed as a luxury. However, white chocolate should not be mistaken as a healthy sub

s. In fact, following criticisms made by the Food and Drink Federation in 2004, Mars announced tha

th its most popular sub-brand being Kinder Surprise. American companies Mars and Kraft Foods are F

the taste of Cadbury chocolate as high as British consumers do requires investigation. Lifestyle play

usual with its high demand for luxury and dark chocolate, France is extremely important to the cho

e French market. Mars Inc. and leading Swiss manufacturer of premium chocolates, Chocoladefabriken Li

late manufacturing, appear to be led by Belgium and France, and prefer the pure taste of darker chocol

ulture. 'Taste proves to be the critical element in increasing demand for French chocolates by recasting

n terms of boxed chocolates, countlines, moulded bars and novelties varied significantly from one co

ed been the case for the last ten years (Datamonitor 2004,

Business Insights 2008). With regards the

26%

n n Mars q n Leaf q n

Cadbury Nestle Terry's Suchard

Private Label Other

29%

Source: Datamonitor, 2002, United Kingdom - Chocolate Confectionery, p.10

Figure 3.3: Chocolate Confectionery Market Shares in Germany, 2001

n

n

Ferrero

Stollwerck q q Jacobs Suchard Mars n n Other Nestle Private Label Ludwig Schokolade 21% Source: Datamonitor, 2002, Germany - Chocolate Confectionery, p.10 5% 2%

Figure 3.4: Chocolate Confectionery Market Shares in France, 2001

n n q q Ferrero n n

Nestle Lindt&Sprungli Mars

Jacobs Suchard

Chocolat Poulain Other Chocolaterie Cantaiou E E Guy lian

17%

Source: Datamonitor, 2002, France - Chocolate Confectionery, p.9

asing reliance upon capital-intensive manufacturing

(Tully, 1989). Although many Nestle brands are g

e world (Rogers, 2007). Raeber, head of the

European zone of Nestle until 2001, said that 'Most Europ

s successor Peter Brabeck agrees that 'You cannot regionalize or globalise food products and consum

ark chocolate really is more popular in France than it is in the United Kingdom will also be investigated.

CHAPTER 4 RESEARCH METHODOLOGY

h are critically analysed and the most appropriate method of research for this study is identified. The

n types, which were later extended to ten. It should be noted, however, that research rarely falls neatly i

d. This is a logical way of answering the research question; the hypotheses can be proved to be either tr

tead, research should seek to gain rich insights into complex social situations. An interpretivist pers

sing data in the same way (Bryman, 2004). Critical realists, however, acknowledge that the categori

Positivism Deductive eriment

Research philosophy

Research approaches

Cross sectionalSampling Secondary data Observation Interviews Questionnaires Longitudinal Ethnography Action research Inductive Interpretivism

Casestudy Grounded theory Realism

Research strategies

Source: Saunders et al., 2003, p.83

nd used to develop a theory. The researcher takes a deductive approach and tests a series of hypothes

4.3 Research Design

e direction according to emerging data and new insights. Descriptive research, on the other hand, often tr

esearch strategies and make up the third layer of the 'research onion'.

Several different forms of researc

rated (Gill & Johnson,

2002). While reviewing the literature, however, the researcher came across a and time is limited.

, however, is inductive

as not granted access to

Nestle S.A. and was therefore unable to obtain the documents needed to put th used as part of this strategy.

ental strategy were also

tional marketing of Nestle chocolate forms the

basis of the research. A study of the world's largest man

s are conducted on the assumption that the target population is able to understand and respond to t

ho are might not be representative. This method is used for examining the link between consumer p

ge and development over a

period of time (Saunders et al., 2007). Although the trends of standardisatio

searcher with all the information

that was needed to answer the research question; the extent of adapt

analysis procedures (Saunders et al., 2007). The main advantage of using mixed methods is that different

Qualitative versus Quantitative research

tured and offer the subject very clear alternatives, leaving very little choice. Qualitative methods, on

the adaptation of Nestle products are used and are explained in section 4.4.3. Interviews with consumers

therefore selects one sample from each market, so that each sample can be generalised to the whole ma

mate of the number of chocolate consumers in each market. Probability sampling is therefore rejected.

Saunders et al., 2007). It might be possible to generalise from a non-probability samples, but not on statis

anageable, the 'snowballing' can stop (Bryman, 2004). In this study, however, the main problem faced b

ze is likely to be small and not representative of the entire population, although its validity depends up

2007). Since the target group for chocolate is large, great variance in tastes is expected and this tech

are usually those who are interested in the topic. The technique is therefore useful for exploratory research

but it is less costly and doesn't require a sampling frame. However, the researcher requires sufficient

10 consumers that fit each quota are selected.

udied. Multiple sources of data were triangulated: secondary research was used to develop hypoth

be lost and the reliability of the results would be maximised. The questionnaire consisted of two

some possible answers might not be included in the set. When the set was not exhaustive, `other'

broad spectrum of brands present in all three markets, as well as certain local brands. The piloted

e representative. Consumers were initially asked to confirm their nationality, and then asked whet

to the target group. One from each group was then contacted, explained the form of the experiment

sibilisation. In each case, consumers were asked whether they noticed a difference in taste betwee

4.6 Credibility of Research Findings4.6.1 Research Ethics

nnaire distributed in stage two of the research included a demographics section, in which the r

4.6.2 Reliability

threats to reliability (Robson 2002, Saunders et al. 2007):

n in which data is collected might not be representative of the whole area. For this reason, urban a

s are given can depend upon the country itself; 'If 55% of the people who try a new product in Italy say

as listed, so that each respondent had an equal chance of obtaining a 'high' score. In phase three, th

pt products for different regions. However, consumer tastes can differ from one part of a country to the

ase study can add value to existing research and, together with secondary data, it can be generalised t

CHAPTER 5 RESEARCH FINDINGS AND DATA ANALYSIS

CHAPTER 5: RESEARCH FINDINGS AND DATA ANALYSIS 5.1 Review of Research Objectives

on is becoming a useful tool for global players in the chocolate industry, or whether adaptation is sti

chocolate manufacturer standardise its product, or adapt country by country according to national t

ce cause the world to become a global market, implying similar tastes irrespective of region or country, o

objectives 3) to 5) sought more specific answers to the problem and demanded primary and secondar

sumer preferences have changed, stages two and three investigated whether or not the statements are st

olate as a snack and consume filled chocolate bars, while Germans and French see it as a luxury p nternational brands

es

53 Total British males 4 7 6 ch country, of which 25 were male and 25 were female. The number of valid responses is illustrated 5 3 25 females 4 Table 5.1: Breakdown of the respondents in terms of age and gender 7 7 4 3 25 German males 3 8 5 5 4 25 females 4 7 147 6 5 5.2.1 Is White Chocolate more popular in the UK than in France? 2 24 French males 3 6 6 5 3 23 females 2 rk chocolate, 50% preferred milk chocolate, 14% preferred white chocolate and 2% had no prefe 8 8 4 3 25

e. This contradicts secondary data presented in chapter three which suggested that Britons are the largest c Figure 5.1: Chocolate Preference of British Consumers

n

n

Females

Males

Dark Milk White No chocolate chocolate chocolate preference

Figure 5.2: Origin of respondents preferring white chocolate to milk or dark

chocolate

n

n

British

French CI German

ever, milk chocolate was the most popular overall, particularly with men. Datamonitor (2004) suggested

Figure 5.3: Origin of respondents preferring dark chocolate over white and milk

chocolate

n

n

British

French German

Figure 5.4: Chocolate preference of French consumers

Dark M ilk White No chocolate chocolate chocolate preference

le filled chocolate dominated the UK

market. Responses to the questionnaires partly supported this data

Figure 5.5: Frequency of chocolate purchase by form, German respondents

Boxed chocolate

n n q n

nn q n

Never From time to time Once a week Every day

Solid chocolate

Several times a week

Chocolate bars 0 10 20 30 40 50 60

Number of respondents

Figure 5.6: Frequency of chocolate purchase by form, French respondentsBoxed chocolate n Solid chocolate n q n

nn q n

Never From time to time Once a week Every day

Several times a week Chocolate bars

10

20

30

40

50

60

Consumers

Figure 5.7: Frequency of chocolate purchase by form, British respondents

Boxed chocolate

n n q n

nn q n

Never From time to time Once a week Every day

Solid chocolate

Several times a week

Chocolate bars 0 10 20 30 40 50 60

Number of respondents

gure 5.8. According to this analysis, the most frequently bought chocolate by the French and Germa

5.8: Percentage of German, French and British respondents buying particular forms of chocolate at least o

E

E

% Germans

% French % Britons

Chocolate bars

Solid chocolate

Boxed chocolate

ury is still achieving more success in the United Kingdom than on the continent, although its Crunchy bar

d that they consume

these brands. A later stage of the research investigated the adaptation

Walnut Whip Quality Street Rolo Aero Choco Crossies Choclait Chips Aftereight Milky Bar Nestle Noir Crunch Smarties Nuts Lion KitKat

o Britons n 0 10 20 . n French 50 60respondents (%)

40 . 30 Germans

a

role. In order to analyse the results, the researcher recorded the number of times each

company w

e 5.10: 'Which is your favourite chocolate confectionery company?' - results from the British resp

n q n

nq n

Cadbury Nestle Green&Black

Mars Lindt&Sprungli Thomtons Tesco Others 18%

, Green and Black's, which is also of British origin, was rated highest by 8% of the respondents. G

6% 10% 23% n

n

Ferrero Kraft Nestle Ritter

n n 10% q q Mars n 10% 17% n

Lindt&Spaingli Others 0 August Storck

12%

and Suchard marketed by the American company Kraft. 10% of the

respondents said that they m

8% n n q n E n 17%

nn q n E n

Nestle Lindt Others Kraft Ferrero Poulain

Mars

specialise in premium chocolate, often hand-made, which can be individually picked

by the con

play as

strong a role as culture in influencing chocolate choice. Consumers from all three

countries

e groups. The segmentation by age is in fact more pronounced than the segmentation by culture exp

Percentage of respondents

100%

90% -80% -70% -60% 50% 40% -

q q

qq

No preference White chocolate

n n Milk chocolate Dark chocolate 30% 20% 10% 0% 53

income rises, the number of consumers of organic or fair-trade chocolate appears to rise too. Of

Figure 5.14: Percentage of respondents consuming organic or fair-trade chocolate

% respondents 20 consuming organic or fair- 15trade chocolate 10

n

n

Men

Women

2000

Monthly Income (?)

mongst these were the following: are divided into 16 small squares. Variations of the standard milk, dark and white chocolate are

o

Source: Image 1

ducts which combine chocolate with biscuit. This reason appeared in several of the questionnaires c

Source: Image 2

n of French, German and British respondents, but the reasons were always different. A large number of

s as the main reason. This suggests that although milk chocolate was slightly more popular than da

Source: Image 4

which each product is produced, which is labelled on the wrapper. In some cases, inconsistency w

d its ingredients are standardised across all three markets. Nuts is also standardised across all t

each adaptation, which suggests that the variations in the recipes are only slight.

SmartiesIn all three markets, Smarties are available in the following forms: Mini carton 14.9g Hexatube 40g

an Smarties contain 456kca1 per 100g, while British Smarties contain 461kcal. The reason for the

Figure 5.15: Nutritional values (per 100g) of Smarties produced in the UK and in Germany80

70 60 50

CarbohydratesSugar

E

0

EC 7

-

E 4 0 n

En

United Kingdom Germany

30 20 10

Fat Protein

n the UK, which suggests that the level of sugar might be higher. Unfortunately, the level of sugar w

Source: Image 5

Figure 5.16: Nutritional values (per 100g) of AfterEight produced in the UK and in Germany80

Carbohydrates70 60 50

EE

E

- 40E n

E

30

En

United Kingdom Germany

20

Fat10 -

Protein

his gives Nestle great potential to adapt the product to suit local tastes. KitKat appears to be an all-ro

The following variations are currently available in the UK:

4 Finger Milk 4 Finger Dark 2 Finger Milk 2 Finger Dark 2 Finger Orange 2 Finger Mint 2 Finger Cappuccino Chunky Milk Chunky Peanut Butter (Web 8)

Source: Image 6

variations, known as the 'Kit Kat temptations' range, were launched in the UK in 2004 and 2005 and later - Red Berry - Seville Orange - Strawberrys and Cream

ge

pudding Yoghurt

- White chocolate

Passionfruit

he low-cost innovations failed. Although the lemon yoghurt version of the Kit Kat had worked we

lories per 100g were higher in the British bars than in the German bars.

50

Carbohydrates

Sugar40

Figure 5.17: Nutritional values (per 100g) of KitKat 4-Finger produced in the UK and in GermanyCarbohydratesiU

?

?

United Kingdom 50

E

E

Germanyt5

30

u ar40

Protein

* Fat20

gure 5.18: Nutritional values (per 100g) of KitKat 4-Finger Dark produced in the UK and in Germ

60

?

?

United Kingdom 10 E 30

Germany

- Fat20

Smarties

Aftereight KitKat Standard KitKat bark10

KitKat Chunky

ba ba ba 4 Protein ba0

b British 1 X X

X ost. In Germany, it contains 512kcal / 100g, compared with 518kcal in the UK. Per 100g, 1.8g s X

Figure 5.19: Nutritional values (per 100g) of KitKat Chunky produced in the UK and in Germany70

X

60

Carbohydrates 2

X50

s

40 E E

X X X

E n

En

United Kingdom Germany

ig 3020

10

E

E X3 X

Protein

X

X X vels, sugar levels and creaminess. The consumers were also asked whether they noticed a differ

X

The results on the cocoa levels and creaminess were inconclusive, since the volunteers4 did not observe a notable difference. However, three German ladies and one French

man noticed that certain British variations were sweeter. The preferences of the five

X

XX

X

5 X X X X

X German 1

ents the second and so on. When the British version was preferred, a 'X' was placed in the column a. W

X X

Table 5.2: Did consumers prefer a) the British adaptation b) the German adaptation? X XX

2 X

X X X

X 3 X X X

ble, the researcher allocated points to each consumer according to which version of the product tested X n the following way: X 4

X

X X 5 : X X

version. The score for Smarties was therefore 2. The process was repeated for all five products until X XFrench 19.5 ,I, neutral

P`British' tastes

X X

BF

1

2,5 `German' tastes

X B = British group, F = French group, G = German group X X

mplete inclination towards products produced in Germany. It can be seen that the German group

2

Sugar levels

X X X

ter version of all the products tested. The researcher sought to find out whether the stereotype a

X X 3 X

alysis and again, points were allocated to each consumer according to which version of the product

following way:

ightly different:X X12.5 neutral

group: 15, French group: 13.5.

PSweet

BF

1GX 4

X Less sweet

73

X X X X

X 5

X X

X French and German groups tend slightly towards the less sweet versions. X

X ccording to data collected about consumer needs, is still necessary in today's markets. The followin

Hypothesis Test resultHi: White chocolate is more popular in the United Kingdom than in France Accepted H2: H:Dark chocolate is the most popular choice in France Rejected H2: H:The French and Germans buy mainly boxed chocolates while the Britons buy mainly filled bars Partially accepted H2: H2: H2: H:Local brands are the most popular H:Brands are adapted to local tastes H:Britons prefer sweeter chocolate Accepted Accepted Accepted

rged slightly with the United Kingdom and Germany. Additional insights involved an analysis of the lin

nce, Germany and the United Kingdom are at a similar level of economic development and form a k

snack between meals is already a long-running tradition; the reason Rowntree developed the slogan "Ha

s. A follow-up study would determine whether these results are the function of a small sample, or wheth

5.5.2 Is Standardisation apparent?

products on offer also varies from one country to the next. Lemon KitKat and Lemon Aftereight are avai

CHAPTER 6 CONCLUSIONS AND RECOMMENDATIONS

CHAPTER 6: CONCLUSIONS AND RECOMMENDATIONS 6.1 Introduction

aw together some of the conclusions arrived at in the earlier chapters and allow herself some pers

d in the years leading up to 2004. The researcher performed a cross-country analysis between Fran

6.2.1 Results

ns can vary greatly from one country to the next. These contradictions were explored through the

s, fillings such as lemon are being added to popular brands such as Rittersport and Nestle AfterE

that British consumer needs have converged slightly with the rest of Europe requires further anal

s such as Nestle S.A. are opening factories in different countries and are therefore able to adapt their

S.A., it does appear to be worth adapting products. The famous KitKat has achieved tremendous suc

the most amount of chocolate. The researcher aimed to investigate the differences in tastes between the B

vant countries. With a larger sample, a statistical package such as SPSS could be used and a more

g to a recent study undertaken by Mintel (2008), the demand for organic chocolate is expanding rapid

or an expansion of the luxury chocolate lines.

oubled in the UK between 2005 and 2007, suggesting that the health and awareness trend is already ha

ce of more extensive advertising or affordable pricing? There might also be logistical reasons or mar

able the extent of adaptation to be determined. Conclusions could therefore be drawn as to wheth

and essence isn't lost. Marketing director of Green and Black explained, "We are hoping to double

chocolate industry. Since confectionery lacks an extensive history in developing nations, taste pref

inues to rise. According to Rogers (2007), sustained high costs of cocoa, sweeteners and milk i

BIBLIOGRAPHY

BIBLIOGRAPHYBooks

Assael, H. (1998), Consumer Behaviour and Marketing Action. Cincinnati, OH: South Western Publishi

nner, J. G. (1999), The Chocolate Wars - Inside the Secret Worlds of Mars and Hershey. London: Harper C Bryman, A. (2004), Social Research Methods. New York: Oxford University Press.

kainen, I. A. (2007), International Marketing. Mason: Thompson.

sumer Behavior and Culture: Consequences for Global Marketing and Advertising. California: Sage Publ

(2004), International Marketing Strategy: Analysis, Development and Implementation. London: Thom

e, B. (1999), Cooperative Strategy - Competing Successfully through Strategic Alliances. New York: Wiley.

L. (1999), Contemporary Issues in Marketing. New York: Palgrave Macmillan.

way World. New York: Routledge.

02), Research Methods for Managers. London: Sage. Groucult, J. (2005), Foundations of Marketing. Londo

u Monde 1866-1966: Presence de Nestle. Rivaz: Jean Heer.

(1997), Business Research: A practical guide for undergraduate and postgraduate students. Chipp

bal Marketing Management. London: Prentice Hall.

ing Management - the Millenium Edition. New Jersey: Prentice Hall.

ational Marketing Research. New Jersey: Prentice Hall. B. (1996), The Business and Marketing Environment. London: McGraw-Hill.

Mapping the Global Condition: Globalisation as the Central Concept. London: Sage.

al World Research. Oxford: Blackwell.

, P. and Thornhill, A. (2003), Research Methods for Business Students. Harlow: Financial Times Prentice Hall.

, P. and Thornhill, A. (2007), Research Methods for Business Students. Harlow: Financial Times Prentice Hall.

stle - the Secrets of Food, Trust and Globalisation. Stuttgart: Deutsche Verlags-Anhalt Gmbtt.

cs. Essex: Pearson Education.

dy Research: Design and Methods. Thousand Oaks, CA: Sage.

es

ything'. The Economist, 22/11/97, p.87.

ategies: case study - Green & Black's'. Brand Strategy, 08/04/08, p.26.

vich Ivan makes Russian fairy tale come true for Coke'. M&M Europe, September 1998, p.12.

ng the recipe: flavour experiment for KitKat leaves Nestle with a bad taste'. Wall Street Journal, 06/07/0

yperreality and globalisation: culture in the age of Ronald McDonald'. Journal of International Consume

8), 'Chocolate Confectionery Industry Insights',

l-Mart pulls out of Germany'. The Guardian, 28/07/06.

, `Globalisation and belonging: the politics of identity in a changing world'. New Political Science, 26(1)

Chocolate confectionary in Europe - industry profile' (ref. code 0201-0038). Business Source Premier. Febr

Chocolate confectionary in the United Kingdom - industry profile' (ref. code 0183-0038). Business Sourc

many - industry profile' (ref. code 0165-0038). Business Source Premier. February 04. - industry profile' (ref. code 0164-0038). Business Source Premier. February 04. industry profile' (ref. code 0199-0038). Business Source Premier. February 04. healthy chocolate', Business Source Premier. November 05.

ctors, including culture and ethnicity, affect the choices and selection of food we make'. The Inte

ian, 08/03/02. English, A. (2007), 'Marvellous Mondeo'. The Telegraph, 28/04/07.

uromonitor PLC, London.

te industry and its impact on cocoa production in West Africa'. Journal of Economic Geography, 1(20

3), 'Factors influencing successful brand extensions'. Journal of Marketing Management, 19(7/8),

ents in preference for plain chocolate across Belgium and Poland'. Food Quality and Preference, 12,

e behaviour of European and Japanese multinationals. An empirical investigation'. Journal of Marke

ation: the Japanese approach'. Journal of Marketing Practice: Applied Marketing Science, 2(4), pp. 53-7

vard Business Review, May-June, pp.92-102.

s tried to sell us this as health food)'. The Guardian, 23/12/02.

08'. Mintel, 01/04/08.

any influences on

global product standardization',

International Marketing Review. 24(6), pp. 678 -

of the chocolate

market - 1999'. British Food Journal, 104(6), pp.435 - 444.

Harvard Business Review, May-June, pp. 17-31.

pp.32-39. similar countries? A cluster based analysis'.

andardised among

International Journal of Advertising, 1

International Herald Tribune, October 5, 2001, . Tully, S. (1989), 'Nestle shows how to gobble markets'. Fortune Magazine, 16/01/89.

a case of construct

validity'. Advances in Consumer Research, 5, 1987, pp.693 - 701.

ocolate'.

Enterprise and Society, 2(3), p.593. 0908-1666). International Business Economics, vol. 1, pp. 3-20. welfare factor: a cross-national analysis'. In

promotion' (ISSN and the social

Comparing Nations and Cultures, edited

s buy'.

Marketing and Research Today, February 1993, pp. 45 - 49.

2005.

Image 3 (cited 21/08/08): Image 4 (cited 20/08/08): Image 5 (cited 20/08/08): Image 6 (cited 20/08/08): Web 1 (cited 25/04/08): Web 2 (cited 25/04/08): Web 3 (cited 26/07/08): Web 4 (cited 26/07/08): Web 5 (cited 27/07/08): Web 6 (cited 26/07/08): Web 7(cited 27/07/08): Web 8 (cited 08/08/08): Web 9 (cited 07/08/08): Web 10 (cited 05/07/08): 'Sweet offerings for Cadbury chocolate'. Web 11 (cited 05/07/08): om/2007/04/15/cadbury-introduces-new-uk-dark-c hoc olate?offerings/

Web 12 (cited 08/08/08): oc al e=ukenl&PagecRef=483 &Mid=483 Web 13 (cited 26/07/08): Web 14 (cited 19/08/08): Web 15 (cited 26/07/08) m Web 16 (cited 08/08/08): Web 17 (cited 08/08/08): Web 18 (cited 01/09/08): Web 19 (cited 01/09/08):

APPENDIX I QUESTIONNAIRE

uricCardes metropolitan university p?Ifysgol metropolitan Caerdyd d

Research undertaken by S. Beresford QUESTIONNAIRE 2007-2008 Full-time MBA student

atterns of chocolate in the United Kingdom. All the information gathered is strictly confidential and will be used fo

SECTION 1

Every day Several times per week Please circle the corresponding answer Once a week Occasionally 1. Approximately how often do you buy each of the following? Never Chocolate bars 5 4 3 2 1 Solid chocolate 5 4 3 2 1 Boxed chocolate you like the most? 2. Which type of chocolate do 5 4 3 a. .Whi te chocol ate c. Dark chocolate 2 a. . Milk chocolate d. No preference 1

e brands?

(Please list them in order of preference with 1 denoting your favourite, and give reasons, e.g. 'Nestle becaus

1) 2)

because because

3)

because

4. Which of the following chocolate confectionery do you buy?a . .K i t K a t Affereight Lion Nuts Smarties Crunch b. . Milky Bar (Galak) Choclait Chips c. .Choco Crossies d. .Flake e. .Dairy Milk I. Bournville deeply dark m. .Ferrero Rocher Ferrero Raffaello Kinder Bueno Kinder Chocolate Bar Toblerone n. .Guylian Sea Shells

(you may circle as many as you like)

o. .Galaxy m. .Milky Way Snickers Mars Bar Poulain Aero Nestle Noir Z. Lindt Lindor

Others (please list and specify type or flavour, e.g. Lindt - dark, Milka - milk, Ritter Sport - strawberry):

5. Do you consume chocolate which is organic or fair-trade?a. a.

.Yes - both

c. Yes - Organic .Yes - Fair-trade d. No - neither

SECTION 2 Please tick the corresponding boxGender male female

Age

53

Occupation

student unemployed

employed housewife /husband

self-employed retired

Approximate take-home (net) monthly income < ?800 ?800-?1600 >?1600

uld be interested in taking part in a follow-up study, please provide your contact details (name, tel. no., email a

Thank you for your co-operation

92

t ICCardiff's metropolitan universay p-i ysgol metropolitan Caerdydd

S. Beresford MBA Forschung

UMFRAGE

um in Deutschland zu analysieren. Die gesammelten Daten werden streng vertraulich behandelt, anonym analysiert und nur fur die a

T E IL 1

Jeden Tag Mehrmals pro Woche Bitte markieren Sie die passendepro Woche Einmal Antwort Ab und zu Nie 1. Ungefahr wie off kaufen Sie die folgenden Schokoladensorl-en? Schokolade Riegeln 5 4 3 2 1 Schokolade Tafeln 5 4 3 2 1 2. Welcher Schokoladentyp gefallt Ihnen am besten? Pralinen 5 4 b. .Weisse Schokolade c. Zartbitter 3 2 b. .Milchschokolade d. keine Praferenz 1

arken nach lhrer Vorliebe auf, wobei an erster Stelle Ihre Lieblingsmarke genannt werden soil und welter entsprechend. Geben Sie unbed

1)

weil

2)

well

3)

weil

he der folgenden Schokoladensorten kaufen Sie? (Sie durfen so viele Antworten ankreuzen, wie Sie meichten)g . .K i t K a t j. Flake s. Galaxy g. . Affereight k. Dairy Milk t. Milky Way i. .Lion I. Bournville deeply dark u. Snickers g . .Nuts m. Ferrero Rocher v. Mars Bar g . .Smarties n. Ferrero Raffaello w. Poulain I. Crunch o. Kinder Bueno x. Aero g. .Milky Bar (Galak) p. Kinder Chocolate Bar y. Nestle Noir h. .Choclait Chips q. Toblerone Z. Lindt Lindor i. .Choco Crossies r. Guylian Sea Shells

tte listen Sie die Marken auf and geben Sie die Eigenschaften an, zip. Lindt - Zartbitter, Milka - Milchschokolade, Ritter

5. Kaufen Sie Bio- Schokolade oder Schokolade vom Fairen Handel?b. Ja - beides b. Ja - Fairer Handel c. .Ja - Bio Nein - keine

T E IL 2 Bitte kreuzen Sie die entsprechende Antwort anweiblich Geschlecht mannlich 53 18-29 30-41

angestellt

selbststandig pensioniert

arbeitslos

Hausfrau/-mann

Einkommen pro Monat (netto) 2000?

Falls Sie Interesse hotten, in einer Verlaufsuntersuchung teilzunehmen, bitte geben Sie lhre Kontaktdaten (Name, Tel. Nr., Email Adresse) an:

Vielen Dank far Ihre Zeit

uricCardiff's metropolitan university prifysgol metropolitan Caerdydd

Recherche realisee en 2008 par S. Beresford Etudiante a plein-temps en Masters de Commerce (MBA)

colat en France. Toutes les informations rounies dans ce dossier resteront strictement confidentielles et ne se

t?

s le plus?

Tous les jours Plusieurs fois par semaine Une fois par semaine De temps en temps Jamais Barres chocolatees 5 4 3 2 1 Tableites de chocolat 5 4 3 2 1 Pralines 5 4 3 2 1

chocolat preferees?

(Citez les par ordre de preference et expliquez pourquoi , par exemple 'Nestle, parce q

3)

parce que

m . .K i t K a t Affereight Lion Nuts Smarties Crunch g. . Milky Bar (Galak) Lesquels des chocolats suivants achetez-vous? (vous pouvez en choisir autant que vous vouiez) Choclait Chips h. .Choco Crossies g. .Flake Dairy Milk I. Bournville deeply dark m. .Ferrero Rocher Ferrero Raffaello Kinder Bueno Kinder Chocolate Bar Toblerone n. .Guylian Sea Shells m. .Galaxy Milky Lindt Autre, priere de bien vouloir mentionner (par exemple, Way - noir, Milka - chocolat au lait, Ritter Sport - fraise): Snickers Mars Bar Poul ai n Aero 5. Achetez-vous du chocolat bio ou de commerce equitable? Nestle Noir Z. Lindt Lindor c. Oui - bio c. Oui - les deux b. Oui - commerce equitable d. Non - aucun

SECTION 2 Cachez la case:

Sexe

masculin 18-29

feminin 30-41 42-53 >53

Tranche d'Age