12/21/2011 1:12:00 AM

ALL ABOUT CHOCOLATE

STARTING PHASE If youve decided to channel your chocolate passion into a home-based business, youll want to stay apprised of changing trends in the chocolate market. For instance, be aware of new consumer flavor preferences, says Joan Steuer, owner of chocolate industry forecasting firm Chocolate Marketing. In addition, creative packaging ideas or tie-ins with other products will help you stand out. You'll also need to be vigilant monitoring other industries to identify trends that apply to the chocolate industry, Steuer says. With this knowledge, you'll be set to embark on starting your home business. Step 1 Organize your chocolate business. Meet with a certified public accountant experienced with home-based businesses. Determine the best business structure: sole proprietorship, limited liability company or corporation. Consult a commercial insurance agent about the proper policy for your homemade chocolate business. Visit your city or county clerks office for a business license, and inquire about other necessary permits. Contact your state department of revenue for a sales tax license. If youre in the Greater Houston area, for instance, you can obtain two business startup packets issued by the city's One Stop Business Center. The packets include information on licenses, permits and other requirements for Houston-area businesses. View statewide requirements as well. Step 2 Finalize your product line. List your chocolate creations by variety and flavor. For example, you can produce chocolate, chocolate divinity and chocolate peanut butter fudge. If cakes are on the menu, create a wellrounded selection for different tastes. Finally, remember that chocolate devotees appreciate unconventional creations as well. Explore new product and flavor combinations with trusted family and friends. Step 3 Create a yearlong promotional plan. Spread out your calendar and identify dates that would be enhanced by fine chocolate products. Examples

include Valentines Day, Mothers Day and birthdays. Design a promotion for each event, and integrate all of your products into the overall plan. Explore a Chocolate of the Month promotion to create a regular customer base. Finally, widen your circle of contacts by holding chocolate tasting parties at friends homes. Step 4 Purchase commercial chocolate-making equipment. Your volume production will be easier with mixing, cooking and cooling equipment that can handle you specific needs. Select the type of equipment to fit the scale of your operation (see Resources). If you want to limit your cash outlay, consider upgraded equipment now and purchase the rest when your production needs increase. Step 5 Obtain health department approval. Since youll be making and selling products for public consumption, your local health department will likely need to approve your production facilitys cleanliness and sanitation. Obtain information on local requirements, and schedule an inspection date. Thoroughly scrub your preparation area beforehand, and correct any discrepancies immediately. Step 6 Purchase your chocolate packaging supplies. Obtain quality cake and candy boxes for your chocolate confections. Explore quantity discounts by anticipating your packaging needs for all of your promotions. Include nonperishable chocolate-making supplies as well. If you plan to market your products in local retail outlets, order a selection of stands and display fixtures (see Resources). Step 7 Market a demonstration batch. Create and package two or three varieties of candy or fudge, and personally visit day spas and upscale beauty salons with samples and product for sale. Continue your free sample tour at professional offices and real estate agencies. Provide popular restaurants and delis with samples, and ask the owner or manager if the eatery will agree to carry your products. Step 8 Market through your chamber of commerce. Join the chamber and take advantage of the opportunities youll receive as a member. For example,

you can bring product samples to a member seminar or exhibit at an upcoming chamber business expo event. Pinpoint member businesses that would benefit from regularly gifting clients with your chocolate products. You can join your local chamber through the U.S. Chamber of Commerce (see Resources).

Stages in developing business 1. Differentiated Product Concept 2. Product Development a. Creating Product Differentiation b. Product Specifications: Product ingredients, Nutritional facts c. Patent: Scope for patenting a product concept 3. Manufacturing: Manufacturing process/ competence with respect to the product 4. Packaging Development a. Packaging specifications as per packaging and Commodities Act b. Packaging structures for your product c. Packaging graphics/ aesthetics for your brand

5. Branding Strategy a. Brand Name Identification b. Brand Concepts to create differentiation in the mind of the consumers 6. Business Planning (Will get revised at different stages) a. Detail Business Plan after considering all costs (fixed and variable) and other investments b. Finalize the markets to launch as per profitability (basis on potential business) 7. Channel/ Distribution Development a. Distributor Identification: We will identify the right distributors for your target markets. We have a team of people in different markets. b. Wholesaler/ Retailer Identification 8. Marketing Strategy a. Consumer Activities/ Promotions b. In-store merchandising for your brand 9. Sharper the Saw: Ongoing Marketing Interventions required after your brand is in the market. It may be expanding your distribution, availability drives, consumer excitement, increasing your product portfolio, to grow your business We at MarkOUT, strive to identify the relevant marketing interventions at different stages (as mentioned above) for your growth. You can share with us your product/ service details along with the MARKETING NEEDS to markoutindia@gmail.com. We will get back to you. Labels: Branding Strategy, Business Planning, Channel Development, Distribution Strategy, Manufacturing, Marketing Strategy,Ongoing marketing Interventions, Packaging Development, Product Development

W EDNESDAY, DECE MBER 26, 2007 Chocolate Market in India

Facts & Figures 1. Chocolate market is estimated to be around 1500 crores (ACNielson) growing at 18-20% per annum 2. Cadbury is the market leader with 72% market share 3. The per capita consumption of chocolate in India is 300 gram compared with 1.9 kilograms in developed markets such as the United Kingdom 4. Over 70 per cent of the consumption takes place in the urban markets 5. Margins in the chocolate industry range between 10 and 20 per cent, depending on the price point at which the product is placed 6. Chocolate sales have risen by 15% in 2007 to reach 36000 tonnes according to one estimate. Another estimate puts the figure at 25000 tonnes 7. The chocolate wafer market (Ulta Perk etc) is around 35 % of the total chocolate market and has been growing at around 13% annually 8. As per Euromonitor study, Indian candy market is currently valued at around USD 664 million, with about 70%, or USD 461 million, in sugar confectionery and the remaining 30%, or USD 203 million, in chocolate confectionery 9. Entire Celebrations range marketshare is 6.5% 10. The global chocolate market is worth $75 billion annually

Companies 1. The chocolate market in India has only three big players, Cadbury,

Nestle and Amul 2. New brands such as Sweet World, Candico and Chocolatiers are present in several malls 3. The largest target segment for Cadbury is youth 4. Delhi-based Chocolatiers, started with a small shop in south Delhis Chittaranjan Park and has now ventured into malls and multiplexes in NCR, Mumbai and Bangalore, with focus on high-end or designer chocolates, a niche market of their own 5. Candico India is aiming for 400 locations across malls and multiplexes in the country by 2010. Companies & Brands 1. Cadbury - Cadbury, 5 Star, Bytes (chocolate snack), Celebration, Dairy Milk, Gems, Perk 2. Nestle - Bar One, Kit Kat, Milkybar, Munch, Nestle 3. Amul - Amul (Chocozoo, Chocomines) 4. Dairy Milk is the market leader 5. 5 Star (heritage brand which came to India in 1969) has a marketshare of over 14% Consumer Trends 1. Mithai- the traditional Indian sweats is getting substituted by chocolates among upwardly mobile Indians. Instead of buying sweats on Raksha Bandhan, sisters prefer offering chocolates to their brothers. This is the reason for sudden spurt in advertisement between July & Sep by most of the companies.

2. The range and variety of chocolates available in malls seems to be growing day by day, which leads to lot of impulse sales for chocolate companies 3. Chocolates which use to be unaffordable, is now considered mid-priced. Convenience over Mithai in terms of packaging and shelf life in making both middle class and rich Indians opt for chocolates 4. Designer chocolates have become status symbols. They are linked to ones aspiration and lifestyle and malls are perfect points of sale as people usually are happy and gay at these destinations 5. Cadbury initial communication for Celebrations was concentrated on occasions like Diwali and Rakshabandhan. Over the last seven to eight years, the brand emerged as a good gift proposition for occasions and enabled people to come closer. Research done by Cadbury suggested that they should extend the plank of occasion-based gifting to social gifting i.e. all-year-round gifting options 6. Consumers can choose from wide range of chocolates, which initially was limited to Milk chocolates like DairyMilk and MilkyBar. In past few years we have seen so many SKUs with almonds, raisins and all sort of nuts. And how can we forget latest 5 star crunchy and Ulta Perk, which has opened new windows for consumers

7. In past, consumers had negligible inclination for dark chocolates. But now we have seen a change in the Indian palate, which is increasing the base of this sub-segment Advertisement Trends (AdEx - division of TAM Media Research) 1. Chocolate advertising rose by 30 per cent during January-November 2007 compared to January-November 2006 2. Maximum chocolate advertising was during Raksha Bandhan across 2005 and 2006 and January-November 2007 3. As expected chocolate advertising skewed towards kids channels and regional GEC took the second position 4. Cadbury India Ltd rules chocolate advertising on television 5. 17 per cent more advertising during third quarter 2007 (Raksha Bandhan festival) compared to first quarter 2007 6. Regional GEC took the second place with a 21 per cent share ad volumes of chocolates, followed by Hindi movie with 13 per cent share during January-November 2007 7. Among regional GEC, maximum advertising of chocolates was on Malayalam and Bengali channels 8. Cadbury India Ltd was way ahead of its peers with 66 per cent share followed by Nestle India Ltd and Parle Products Pvt Ltd during JanuaryNovember 2007 9. During January-November 2007 the number of new chocolate brands advertised decreased to seven from 12 during 2006 10. Nestle Munch Pop Chocolate led the chart of new chocolate brands advertised on television during January-November 2007 Some BTL Activities 1. Cadbury India has tied up with leading coffee chain Caf Coffee Day for direct sampling of the product in top cities External Environment 1. The prices of cocoa and milk, the chief ingredients used in chocolates, have gone up by 50 per cent, while the price of sugar, another important raw material, has come down. The overall input costs have gone up by 20 per cent. If the prices of these commodities keep increasing, companies will

be forced to increase the prices. India imports most of its cocoa requirements. The prices of cocoa have risen globally due to unavailability of the commodity. 2. US-based chocolate-maker Hersheys is mulling a foray into the Indian chocolate market through its joint venture with Godrej

WHAT MAKES SWISS CHOCOLATE THE BEST

There's a reason why people love Swiss Chocolates - because they are absolutely superb, have great innovative flavors, and literally melt in your mouth! The high content of superb cocoa butter, which gives the chocolate its smooth, creamy texture and the high standards of manufacturing make them an attractive indulgence around the world. Made with fresh milk that is produced by healthy and Swiss Cows (more happy than those that come from California!), here's what we learned on our recent Europe trip about what makesSwiss Chocolates the best in the world! Swiss chocolates are world renowned for their high quality, mainly for the fact that, besides using only the best ingredients for making chocolate, it is the milk which makes all the difference! It is procured from Swiss cows that are raised on an organic diet of fresh meadow grass and remain healthy and happy in the evergreen Swiss countryside.

The Making of Chocolate The art of chocolate making involves manipulating the crystalstructure of the cocoa, fat, and sugar to provide a smooth melt-in-the-mouth feeling. Here's what we found about the chocolate-making process, and I thought it'd be interesting to share this with you all. 1. Refining The first step is Refining, where fat, cocoa, and sugar are milled to a very fine particle size. 2. Conching The mixture is then subjected to a process called conching, which is the most critical step in chocolate-making. Conching involves kneading the chocolate mixture with additional cocoa butter for 24 to 96 hours at over 150 deg F to give it its final smoothness and creaminess and remove any residual moisture. 3. Tempering

The final step in the manufacture of chocolate is tempering. As liquid chocolate cools and solidifies, the cocoa butter forms crystals. To temper chocolate, it is heated and cooled under controlled conditions so that a fine, even-grained texture is developed. Typically, chocolate at this stage is not heated above 115 deg F. Lecithin, a natural emulsifier derived from soybeans, is added to chocolate at this stage to prevent Blooming (the process of a white haze forming over chocolate when it is cooled) Challenges in Chocolate Making One of the challenges in chocolate-making is that water interferes with the crystallization of the cocoa butter, which can then make the chocolate hard and brittle. So, in 1875 a Swiss manufacturer namedDaniel Peters discovered the key to a successful milk chocolateprocess. Instead of using milk, which is almost 80-90% water, he used milk powder instead! By doing this, he was able to produce a coarse, dry milk chocolate bar. By 1897, however, Mr. Peters had perfected a process using condensed milk to produce an intermediate product called milk crumb. Milk crumb is produced by cooking chocolate liquor with sweetened condensed milk, dry ing this mixture into a powder, and subsequently blending it with cocoa butter to produce chocolate. What is special about Swiss Chocolates is their quality. They are hard and well-formed with clean edges. The smell of a fine chocolate is full and rounded, but never obtrusive. Good chocolate melts like butter, does not stick to the roof of the mouth or feel gritty, and hardly leaves any aftertaste. The best part about these chocolates is the variety of flavors they come in. From Ameretto and Orange to Almonds and some really exotic flavored liqueuers, the Swiss have some really unique chocolates that you couldn't find anywhere else. We enjoyed every bit of our chocolate-tasting venture and it was aprivilege seeing how its made. So, the secret of Good Chocolates are Happy Cows, and Happy Cows come from Switzerland

DEVELOP A PRODUCT MARKETING STRATEGY Developing a marketing plan or strategy to introduce a new technical product can bepainless, and seems confusing only when we lose site of objectives.

Start by writing an outline of your marketing strategy. Then begin by gathering required information for each section in your outline. As you gather your market information, you see critical gaps. Find a way to fill the gaps (e.g. telemarketing). Then polish the inform with helpful tables, charts and graphs. You can even use the outline to organize your marketing presentation!

Developing a Product Marketing Strategy is one of the most challenging and exciting aspects of product marketing and launching a new product. The marketing professional should begin by writing a working outline of his market plan to help organize the study, gather information, and organize the presentation.

I created this outline to develop marketing strategies: Mission Statement Corporate Mission Statement. Manufacturing objectives. Product Development objectives. Marketing objectives.

Customers How many of them are there? What are they buying? What practical problems do they try to solve? What emotional problems do they try to solve? What is the size of your market? What is your customer's price point and other economics? Exactly what does it take to win an order? How long does it take to win an order? Exactly how do customers use competitive products? What's the current satisfaction with competitors?

Market Segmentation Group customers (needs, industry, distribution, geography). Narrow the targets. Select targets. Label the segments. Consider the similarities and differences. Anything missing? Competitors What are they doing now? Where do competitors advertise, and how often?

What is their sales pitch? How do competitors price? How do they distribute? How do competitors position themselves? How do competitors react to threats? How do successful competitors differ from the lesser? What are their market shares? Compare competitors to your organization in terms of your: Strengths Weaknesses Opportunities Threats

Product Position Differentiate your product and your service. Find the opportunity. Its out there.

Remember that famous glass of water? The one that optimists see as half full and pessimists see as half empty? A scientist, however, sees a question -- Was the glass designed with too much capacity?

What we see is, actually, a matter of perception. What your customer sees is, also, a m of perception -- his perception. Understand your customer's needs. Describe your products. Describe your customer's pain ...

Some sales systems will script sales closing techniques based on customer needs or wants. My opinion is to agree with other sales systems which insist that customers only on an emotional level.

Have you bought everything you wanted? Have you bought everything you needed? Of course not. But, how did you feel when your car stranded you on the highway? Were yo a bit more receptive to the idea of buying a new car?

Read this carefully because this is the key to all market strategies. When your sale force closes sales, they will do so only by understanding your customer's emotions.

Your customers will buy from China, India, South America, anybody. Very few industria customers have loyalty to any country or brand name today. If you don't agree, just look number of people drinking bottled water that is imported from other countries. The last t looked, the United States did produce good clean water. Go Figure.

You must understand your customer's psychological needs. Take a piece of paper out a write this down, "You must understand your customer's psychological needs to best succeed in product marketing and sales."

If Possible, Do Market Testing Show product and promotional concepts to customers. Double check.

Make Strategy Decisions Decide on new revenue growth and profits. Decide on new product development. Decide on price. Decide on sales force, distribution, service. Decide on customer psychological factors, not features and benefits. Decide on product promotion.

A popular way to remember the function of marketing is the "four p's of marketing", whic are product (you must have a "new product development process"), place (distribution o where you will sell your product), promotion and price. A gooddefinition of marketing wi provide a more detailed definition of the standard marketing function, and the four p's o marketing.

I added psychological sales factors as a fifth p of marketing; because, your marketing strategy must list the relevant sales psychology factors, and state how these factors wil addressed. Sales psychology is arguably the most important part of a marketing strateg Yet, customer psychology is seldom mentioned in marketing strategies. Write an Action Plan Pert chart on product development. Calendar of planned media. Budget Implement Your Plan

Hold routine meetings to review progress on sales leads. Provide a lead tracking system Nothing is status-quo. Revisit your plan and update.

Setting Objectives The starting point for the advertising plan is the setting of objectives. The statement of objectives would follow the same format as the overall marketing objective. It would inc what to communicate to whom and with what results. Should the advertising generate s produce leads, or enhance an image? To whom must the message be communicated t make that happen? What will be the result of this communication? $X revenue? Numbe leads per prospects reached? A percentage change in awareness? If the product mana runs a mail order operation with no sales force, it might be appropriate to have an objec of generating $X sales from a defined target market over the next twelve months. But m companies would have some combination of sales, lead generation, and/or image reinforcement. If the product is not sold directly to the end-user, a decision must be made about what p of the budget will be devoted to advertising to the end-customer (a pull strategy) and wh part will be devoted to trade advertising (a push strategy). These two groups will require different media and different messages.

Media Planning Media planning starts with selecting the appropriate media and media vehicles to accomplish the stated objectives. Decide how many to use (to increase reach) and how often to advertise in each (to increase frequency). Then coordinate resources to get maximum return from the investment in advertising. That means it is sometimes necess to violate traditional turf boundaries that separate the media (including boundaries betw marketing and sales) and focus on the intended results (objectives) of the advertising. List Potential Media. Start by developing a list of all media and promotional methods t could be used to accomplish the objectives. Analyze each according to editorial format,

circulation, frequency, and cost. Then prioritize the list according to each medium's abil contribute to the plan's effectiveness. The larger the potential audience, the more a product manager will need to consider broad-reach media. The smaller the audience, th more targeted the media must be. Select Appropriate Vehicles. A message of quality is best carried in a publication that "bible" of the industry, whereas announcements of new industrial products are better pl in new-product digests. For product managers not working through an agency (either internal or external), some preliminary information on the media vehicles can be obtaine from Standard Rate & Data Service directories available at libraries with business collections. From that information, the product manager can estimate the cost per prosp for each media vehicle. After narrowing the list, request media kits from the rest to obta more specific information on reader profiles, frequency discounts, ability to obtain reduc list rental with a paid ad, and information about the effectiveness of advertising in the specific publication or broadcast medium. Assess Trade-offs. Assess the trade-offs between the size (cost) of the ad, the impact prospects, and the number of times it can be placed. The cost of a large ad is more tha cost of a smaller ad. However, because a large ad is seen (noted) by more people, the cost per person noticing the ad can provide more efficiency. The assessment should also include placement within the medium. For magazines, ads the covers, front part of the publication, adjacent to specific editorial content, and/or isolated from other advertisements usually have the most effectiveness. For radio, drive time spots typically reach more people than ROS (run of schedule). For television, news has the greatest audience size, although specific programs might have a closer match t the target audience. For direct mail, odd-sized and dimensional mailings can have more impact, but they increase the cost, thereby limiting the potential reach and frequency of mailings. In general, with a given budget, it is usually better to increase frequency at the expense of reach rather than to increase reach at the expense of frequency. Examine Media Combinations. This is the "synergy" part of integrated marketing. For example, timing a telemarketing sales call right after the intended receipt of a direct ma piece can increase the response. Using different media simultaneously can sometimes break through the target market's perceptual barriers. This approach increases frequen but different media can also increase reach by appealing to different segments of the market or to different influencers or decision makers. Making decisions on reach versus frequency and continuous versus pulsing advertising strategies is part of this analysis. Develop Media Calendar. Finally, after examining costs and benefits of the various me

types and combinations, put the entire media plan into calendar format for the year. Thi accomplishes two things. First, it forces the product manager to think in advance. Seco by seeing the combinations of media in one place, the potential impact they have on ea other can be improved. Third, the calendar helps focus on integrated marketing communications by incorporating nontraditional communications vehicles (e.g., semina newsletters, and software programs) into the plan. Creative Strategy The creative strategy should include the basic message and positioning that should be communicated to the target market. Although an advertising agency might be responsib for the creative design of the advertising, the product manager should at least be able t critique it. As mentioned earlier, the advertising message depends on the positioning statement developed at the start of the planning process. The message should always be consistent with the positioning or unique selling propos (USP) and include customer benefits that differentiate the product from the competition Sometimes a company is interested in being positioned as innovative and uses patents "prove" that position. Titleist has used its patented dimpling process to "prove" the quali its golf balls; Samsonite luggage uses line drawings depicting patents and patents pend for the various product features. In any case, the objective of the advertising is to convin potential customers that your product is different from the competition in an important w and that this difference is strong enough to motivate them to buy. For print advertising, the headline should attract prospects to the ad. Sometimes this ca done by stating the benefit or the promise of a reward. At other times, a provocative question will be more successful. The headline should generally maintain a positive ton and be coordinated with the rest of the ad. The copy should contain a benefit in the lead paragraph and use present-tense, active-voice words. If the copy is long, use subheads make it easier on the eye. Identify what the prospect is to do as a result of reading the a Most business advertising (and a growing amount of consumer advertising) strives for d response, so the copy should include the 800 number, the website URL, or other conta information. The layout should take eye movement into account and have a single dom element rather than being overly cluttered. For broadcast advertising, hold the number of elements to a minimum. Words should be conversational and concise. Take advantage of impact if using television commercials. radio, be sure the company/product name is mentioned often. See tshirt online store h For direct mail, set up repeated tests. Test different copy, different package formats, an different mailing lists. If possible, have a control to test against an alternative for each

mailing. Personalize the cover letter and talk about the prospect's needsnot about the product. Use a strong offer to encourage people to respond. Do not simply encourage t to contact the company for more information; provide an incentive such as a free bookle reduced price, or trial offer. If using direct mail (or any direct-response advertising), be s to have inquiry fulfillment materials available. Highlight on the envelope that this is the information the prospect requested. Include the salespeople in evaluating direct-response lead generation programs. Let the see the mail piece before it is mailed to customers and prospects, and ask them for inp Not only will salespeople offer useful suggestions, but they will also be more likely to bu into a program if brought in at the early stages. Source: Linda Gorchels, The Product Managers Handbook, McGraw Hill. You can find this excellent book here You can download powerpoint slide on product development and marketing management here.