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Posted: October 7th, 2023
Market Research for Chocolate Industry
CHOCOLATE PROJECT
1 . CONTENT PAGE
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3 . INTRODUCTION SECTION (“WHERE WE ARE”)
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4.2| About the industry as relevant:
4.3| Defining the audience and the product:
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5.1| Complete Persona Profile of the Primary Audience:
5.2| Complete Persona Profile of the Secondary Audience:
5.3| Complete Persona Profile of the Tertiary Audience:
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7.16| Current Consumer Perceptions:
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7.20 |Points of Parity and Points of Difference – Drops O´ Joe and Awake Chocolate:
8 . GOALS AND OBJECTIVES (“WHERE WE WANT TO BE”)
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9.1| Budget Spent – 18 months | First Location:
9.2| Media Proportion – First Location:
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11 . APPENDIX #1 – QUANTITATIVE PRIMARY RESEARCH QUESTIONNAIRE
2 . EXECUTIVE SUMMARY
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Our company is called Drop O’ Joe and we sell caffeine infused candy coated drops of chocolate. Our product comes in a coffee shaped container which is made out of eco friendly 100% recycled plastic. Our package also has a resealable lid so our product can be eaten periodically throughout the day or all at once.
We conducted primary and secondary market research for our product and for our target audience. For primary research we conducted a focus group and also made a questionnaire which we handed out to our target audience. For secondary research we used data bases and articles to find out information about our competitor, target audience and target market.
Our primary target market are men and women aged 18-34. They are young students and business professionals with busy lives who are constantly on the go. Our secondary target market are men and women who are athletes and participate in various sports in their lives. Out tertiary target market are men and women over the age of 35 who use caffeine to help them get through their day.
The budget we set for the promotion of our product was 5 million dollars. Out of that budget we used XXXX amount and we kept a contingency of $250,000.
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The return on investment that Mr. Howell can expect to see will be 20% of our total sales in our first and second year. After that he will continue to receive the amount he received in the second year until all of the 5 million dollars has been returned. On top of the 20% he will receive Mr. Howell will also earn a 2% royalty of our total sales each year he has an outstanding amount owed to our company.
Our primary target market is between the age of 18-34 so for the promotion of our product we will mostly utilize social media for promotions. More specifically Facebook, Instagram and Twitter. We will run promotion ads on the different platforms in regards to our objectives at different times of the year. We will also use brand ambassadors/influencers that are known to our target area, being Kitchener-Waterloo and the GTA in our first year and then all of southern Ontario in our second year. Periodically we will also use television ads at specific times of the day to target all of our audiences.
3 . INTRODUCTION SECTION (“WHERE WE ARE”)
3.1| Business Overview:
Drop O’ Joe is a business proposition initiated in the fall of 2018, with the idea of creating a caffeinated chocolate product for the typical on-the-go post-secondary student or busy business professional. After the idea was initiated, the topic was researched extensively. The types of market research and consumer research included primary and secondary. Primary research was conduct via a focus group comprised of coffee drinkers and chocolate lovers, as well as a questionnaire/survey administrated to over 50 volunteer participants. The secondary research was gathered through databases like Vivadata and Nielson, along with scholarly Internet sources. This allowed for conclusions to be made on:
- The company’s market positioning
- Relevant industry information
- Developing a primary, secondary, and tertiary target market
- Creating an accurate persona
- Procuring brand analysis with conclusions on market competitors
- Brand inventory, brand exploratory, the points of parity/difference, a SWOT analysis, the products unique selling properties, the marketing mix including the product, place, price, and promotion, the memorability of the product
Upon evaluating the research collected:
- Goals and objectives were defined to determine ‘where we want to be’
- Leading to the marketing mix
- Including the product, place, price, and promotion
After the business determined ‘how are we going to get there using:
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- Strategies
- Tactics
From which Drop O’ Joe was able to determine the appropriate:
- Timeline
- Budget
Where then the company can make rational and factual conclusions with use of all stated above.
3.2| The Situation:
Drop O’ Joe has done extensive research, as stated above. The product is now ready to hit the market yet there is a small roadblock due to finances. The company is asking investor Mr. Howell for a loan of five million dollars, in order to launch the product into the south-western Ontario market. The following report will outline all the relevant research conducted, as well as the return on investment that Mr. Howell will receive.
4 . MARKET RESEARCH
4.1| Introductory Statement:
A series of researches were developed with the aim of understanding the consumer’s profile of chocolate, its demand, the competitors and how fast the market is growing. The first step was the secondary research, which analyzed data from Nielson, Vivadata and internet sources.
4.2| About the industry as relevant:
The consumption of chocolate grows every year around the world. As can be seen in the chart below, between 2012 and 2018, chocolate consumption increased by 11%. Which shows the market trend and high probability of absorption of a product that is differentiated in the market.
Retail Consumption of Chocolate Worldwide from 2012 to 2019 (in 1,000 metrics tons).
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4.3| Defining the audience and the product:
- QUANTITATIVE SECONDARY RESEARCH – CHOCOLATE IN CANADA
(Vivadata)
With these results, it is possible to conclude that the audience will be between 18 and 34 years old, with no gender restriction, since the difference was small, mostly employees and/or students.
After the secondary research to understand the profile of the consumer of chocolate a survey of the pattern of the people between 18 and 34 was started. It was observed that people in this age group tend to concentrate a lot of activities and, in the majority of the times, use the products for maintaining their daily energy. The main product consumed is coffee.
- QUANTITATIVE SECONDARY RESEARCH – COFFEE
Due to the high number of universities and consequent high number of people aged 18 to 34 years, the chosen province was Ontario for the entrance of the product in the market. Ontario concentrates a population of 31,488,000 people in which 3,276,000 are 18 to 34 years old, according to data taken from Nielson in the fourth quarter of 2016.
In this way, a new quantitative secondary research was carried out to understand the profile of coffee consumers in Ontario and to cross the result with the result of the consumers of chocolate.
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(Nielson and Vivadata)
As can be seen from the results, 63% of the population of Ontario between 18 and 34 years consume coffee regularly. 59% are employed and 75% have some kind of post secondary education.
However, coffee is not the only source of energy that this age group consumes. In a smaller amount compared to coffee consumption, people from 18 to 34 years also opts for energetic and teas to harden the running life.
(Nielson)
The demand for energy from the group of people aged 18 to 34 was the deciding factor for the choice of product to be launched in the market.
However, it was still necessary to investigate further the habits and customs of this quest for energy and consumption of chocolate. In this way, five people were invited to participate in a Focus Group. Among them, four people are 18 to 34 years old and 48 years old. The purpose of the age range was to try to understand if a large audience potential was being left behind because it did not fit the age range of 18 to 34 years.
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- QUALITATIVE PRIMARY RESEARCH – FOCUS GROUP
The Focus Group was coordinated by two intermediaries, and two listeners and samples of market chocolates were distributed to understand some perceptions of this type of product. During the Focus Group, the goal was to extract the maximum of perceptions, feelings and demands from the participants according to their routines and habits, in which quantitative research would not be possible.
Participants were asked about buying and consumption habits of chocolate and products that increase their energy, for example: where they buy, what is the motivation to buy, consumption schedule, consumption reason, among others.
The participation of the guests was essential for the evolution of the definition of the target audience and, consequently, the product.
Focus´ Group conclusions:
- There is a high demand for consuming energy in the practice of heavy and/or long exercises, such as marathons.
- There is a demand for people over the age of 34 to consume energy and chocolate.
- People do not tend to eat chocolate in the morning, but they are willing to exchange coffee or energy for chocolate, especially from lunch.
- Although the majority consumed the first homemade coffee of the day, all participants bought (at least) one more coffee (on the go) for the rest of the day.
- Some though many attempts do not like the taste of coffee but continue to take it for lack of choice but have put themselves 100% available to taste the caffeine chocolate.
- People like to vary the flavour of chocolate consumed.
- QUANTITATIVE PRIMARY RESEARCH – QUESTIONNAIRE
After the focus groups and the ideas that were extracted from this stage, three target audiences were defined, however, still needed, and thus, new quantitative research was carried out. This time, the goal of the research was to consolidate some conclusions, mainly on the primary audience, with a more significant number of people, that is, a larger sample, besides expanding the search with the made ones for the product.
At this stage, 51 people aged 18-34 were interviewed, and some conclusions were drawn (Appendix 1):
– In this survey, we found a greater proportion of people who consume coffee. Only 6.3% do not drink coffee;
– 62.2% buy large coffee, 26.2% purchase medium size and just 11.1% buy small size;
– 65.2% consume coffee to give energy during the day;
– Only 2.1% of people do not consume chocolate;
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– 64.6% consume chocolate at least once a week.
– With little difference, 43.4% of people consume small chocolate bar, while 40% consume chocolate drops;
– 65% love milk chocolate; 37.5% love dark chocolate; 27% love chocolate with peanuts; 22.9% love white chocolate and Caramel;
– 64.5% buy chocolate in grocery stores;
– 60.4% buy small size chocolate;
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– 79% are willing to spend CAD1.50 to CAD 3.00 per small size chocolate;
– 62.5% are willing to spend CAD3.00 to CAD 7.50 per chocolate big size;
– 52% are willing to spend CAD7.50 to CAD 17.00 per chocolate big size;
– Most buy by personal experience or suggestion from friends;
– The four media channels that most influence purchases are: Facebook Ad; Instagram As; Television; and Twitter;
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– 66.7% would buy chocolate with caffeine instead of another source of energy;
– 43.5% voted for the name Drops O’Joe.
4.4| Summary Statement:
The combination of surveys was essential to define audience profile and product definition. Secondary research was essential to provide the basis for the beginning of primary research, however, could not define the product without the primary research.
Further research has been carried out to complete this action plan, mainly for brand implementation strategies.
5 . TARGET MARKETING
5.1| Complete Persona Profile of the Primary Audience:
| PRIMARY AUDIENCE | ||
| 1.1 | Demographic information | |
| 1.1.1 | What is the age of the audience? | 18 – 34 |
| 1.1.2 | What is the sex of the audience? | Male and Female and those who identify differently |
| 1.1.3 | What is the income of the audience? | Lower class to upper-class |