Kinder Chocolate Case Study

Stage 1 – Recognize Need for Channel Design Decision

Introduction:

Kinder Chocolate (well known as “Kinder”) is a popular chocolate product brand line of Italian confectionery multinational company Ferrero SpA, which was produced at Frankfurt (Germany) in 1967 for the German market. Kinder Surprise, the famous product of this brand line was produced in 1974. The main idea of Kinder egg is combining a chocolate egg and a toy, besides all toys are designed and developed with safety in mind, rigorously observing international regulations as well as extra safety criteria voluntarily adopted by the Ferrero Group [Official Ferrero web-site]. In 30 years about 30 billion chocolate eggs have been sold all around the world with the different types

The sales would be higher than the sales of the main competitor Mars company if the prices were affordable and the brand line had more effective promotions. Kinder brand entered into the Kazakhstan market in the 2000s and got popular by famous product Kinder Surprise. The company has used creative marketing move that ensured high sales of this product, that is an interesting supply of the goods, which immediately catches the customer’s eye.

The main product Kinder Eggs occupies 91 % of the chocolate brands in the selected market what is 2.83 billion KZT ~ 0.076 billion HKD in 2014. The annual sales volume of Ferrero is 7.7 billion KZT ~ 0.208 billion HKD.

In this article will be analyzed the distribution channel of Kinder and designed a new strategy for setting the Kinder brand on the lead position of Kazakhstan

Moreover, before the brand used traditional trade, that helps everyone can find all Kinder products in every shop, besides the product line spread in whole Kazakhstan cities. We can accept that an availability is a main reason why Kinder has a high sales volume. The official representative of Ferrero is Trade Company LLP Ferrero of Kazakhstan, which is engaged in supplying the goods into all cities.

Reasons to apply a new channel strategy:

After interviewing customers (65 people participated in interview) whose age is ranged from 5 to 28, I made a point on what they would like to change and which of chocolate brands they prefer.

Diagram 1.1

The 64,6% of the customers prefer Kinder (diagram 1.1), but almost 40% agree that the price is too high and only less than 5% disagree with a high price (diagram 1.2). Anyway, customers are willing to buy Kinder products because of the taste, so the price does not impact so much.

Diagram