The Bucharest University of Economic Studies

Analysis of the KINDER

product market

STUDENT:
Șerban Cristian

GROUP:
1751

BUCHAREST
2017
- White Page -
I Description of the company

a) A short history of the product at the global and national level - Ferrero

The main protagonist in the development of the group is Michele Ferrero. Animated
by the desire to create new products based on the most innovative ideas, he revolutionized
food habits of millions of consumers. But to discover the recipe of his success, we must go
back in the 1940s. These are the years when Piera and Pietro, Michele's parents, have turned
their own confectionery into a factory. Now, the story of Ferrero has reached the third
generation: Pietro and Giovanni Ferrero, the sons of Michele and Maria Franca. They have
jointly led the group's operations as general directors for more than 10 years. In April 2011,
Pietro Ferrero tragically died in South Africa while participating in a humanitarian
inspirational mission led by him in order to relaunch Ferrero Company Enterprises. Currently,
Giovanni Ferrero continues to lead the company's operations successfully, proposing even
more ambitious goals, relying on the inspiration and motivation that animated both his parents
and his brother. Today, just as in the past, the same structure based on family values has been
maintained. In short, beyond the brand, turnover and the development of a multinational
company, the story of a Piedmont family has gained tremendous growth power, starting from
the Ferrero Foundation: "Work, Create, Offer."
Ferrero International SA approved the Group's consolidated balance sheet for the year
ended 31 August 2010. At the end of the year, the Ferrero Group consisted of over seventy
consolidated companies (thirty-eight operators, fifteen production plants and three companies
implementing the initiatives Ferrero social services). The group finished the year with a
consolidated turnover of 6.6 billion euros, up 4.3% over the previous period, 0.9 billion
dollars coming from their Kinder products.

II Offer Analysis

a) Presentation of the main bidders (manufacturers, importers) in terms of the

products offered

Although consumption is low compared to other countries, the competition between

chocolate brands is fierce. It is interesting to note that the most crowded "shelf" is the
Premium one, which competes with no fewer than six brands. Direct competition is
represented in this case by brands that offer the same advantages as Kinder. Indirect
competition includes substitute products for this product (tablet chocolate), while the
competition regarding solutions is given by cakes, biscuits.
The main competitors of the Kinder brand are:
Kraft Foods is an American food company that was bought in 1988 for 12.9 billion $ by
Philip Morris Company (today's Altria Group). On March 30, 2007, the company was
separated from Altria Group. The company has two units located in the city of Brasov and the
company is a joint stock company. Kraft Foods Romania is a subsidiary of Kraft Foods Inc.,
the second largest food company in the world. Kraft Foods markets internationally renowned
brands such as Kraft Cheese, Jacobs Coffee and Maxwell House, Nabisco Biscuits,
Philadelphia Cheese, Oscar Mayer, Post Cereals, and Milka Chocolate in more than 150
countries. Kraft Foods Romania is a company based on the production of sweets and
chocolate, especially "Poiana" brand, which is known by 98% of Romanian consumers.
Heidi has its origins in the Swiss Alps, at the praline manufacturer Confiseur Laderach
AG. This is the place where high-quality pralines are produced for over two generations.
Today, Laederach chocolate is present in hotels, restaurants and confectionery all over the
world.
Heidi Chocolats Suisse S.A. was established in Romania in 1994 and is the first foreign
chocolate producer in Romania, representing one of the most important investments in
Romania. In 2008, Heidi's chocolate had a market share of 6.5% in Romania, and for 2009 it
was estimated to cover about 8% of the Romanian chocolate market.
Nestlé, the world's leading food industry, was founded in 1866 by Henri Nestlé and is
today the world's largest food company, with about 253,000 employees and 511 operating
units in almost every country in the world. Nestlé entered the Romanian market in 1995 and
currently has over 600 employees: 350 at the Timisoara plant and 250 at the Bucharest
headquarters. Nestlé Romania's portfolio in 2009 was represented by coffee, hot drinks,
instant cocoa, chocolate-flavored syrup, waffles, chocolate bars, culinary products, infant
food, breakfast cereals, cereal bars and pet food.

b) Volume of production, sales, imports or exports

Romania's domestic consumption of chocolate fell in volume in the first nine months of
last year compared to the same period of 2013. During this period, the best-selling mark on
this market was Mars Romania. Also in January - September, more than half of the expenses
in this category came from the urban area - the big cities and Bucharest - where 27% of the
romanian households are located. Also, almost a third of the purchased volume came from
hypermarkets.
The largest chocolate consumers are three-person households that account for 33% of the
total consumption and represent 21% of the total households in Romania. Also in this
category of the biggest chocolate consumers are households with the head of the family
between 40 and 49 years (33% of consumption, in value), which account for 22% of the total
households in Romania.
The main producers on this market were: Nestlé Romania, Masterfoods and Kandia-
Excelent, covering more than 80% of the market.According to Business Standard, the
chocolate segment is the most dynamic of the local sweets market, estimated last year at a
value of 240 million euros, according to a study by the Nielsen research company.
Consumption preferences appear to be primarily influenced by chocolate ingredients, a
field where options are more numerous, at both brand and market level: white chocolate, milk
chocolate or bitter chocolate, chocolate with different ingredients (peanuts, raisins) or creams
(cappuccino, caramel, yoghurt, strawberries, brandy, rum, peaches, cherries).

VI Advertising

a) Presentation of advertising methods and techniques used for Kinder products

Kinder products are present in publications such as: "Avantaje", "Familia Mea",
"Libertatea pentru Femei", "Mami", "Superbebe", "Baby", "Ioana" and "Lumea
Femeilor". Advertisements are also made through supermarket brochures, sampling and
promotions. Ferrero, and especially the Kinder brand, communicate on-line at
www.ferrero.ro and www.kinder.ro. Through these sites, it aims to reach those people in
the target less exposed to classical communication, making them aware of new products
and their benefits. The site will be promoted through specific media, such as ad banners
on sites that target the chocolate consumer type. The most commonly means of
communication have been chosen to promote the brand, which are also the most
accessible to the public.
The most used advertising strategy is through television, with more than 98% of media
ads being present in this medium. This way, they are giving information about the
 products, and also showing them, creating a visual impact towards the viewer, which
might turn into a consumer. TV spots are mainly broadcast on Pro TV, Acasa, Antena1,
Realitatea TV, Kanal D, Hallmark, B1 TV, Pro Cinema, NationalGeographic, TVR1,
TVR2, Prima TV.
Also, several times a year, other types of promotions are organized, a great example
being indoor giveaways consisting of Kinder Bueno at the cinema.
Indoor advertising can precisely target the desired audience so that it reaches potential
buyers. The customer can position himself closer to the final consumer, such as in the
malls or hypermarkets, where the ad gets to the public at the time of the purchase
decision.
Each producer, in order to promote a sales increase, uses different methods such as:
temporary price reductions, offering a larger amount of product at the same price, grouped
sales, contests, offering samples of that product, etc.
The interest of marketing policies at the store level and at merchandising is to make
the customer buy as much as possible. Merchandising aims to influence purchasing
behavior. Clarity at the shelf is important. A customer placed in front of a shelf with
products of different sizes and colors is a lost customer. Each product must have its place,
not to make the buyer look among the piles of other products. This is especially true for
men who generally shop for necessity.

VII Market Forecast

a) Description of Kinder product market variation over the next timeframe

Through spots, advertising campaigns, and all other communication channels, Kinder
has delivered what they wanted and reached the top of consumer preferences. A leader in the
sweets category and among the first players in the chocolate industry, Ferrero reported in
August 2016 a turnover of 10.3 billion Euro, up 4.7% over the previous period, which shows
that TV spots, panotage, advertising were truly successfull and increased the company's
revenue.
The emergence of new brands on the Romanian market is an absolutely normal
phenomenon, which meets both the needs of consumers and the position of Romania, a
member state of the European Union. That's why companies may expect a further increase in
the competition of the chocolate bars market, which might be even stronger than it is.
In the future, companies will focus on developing strong brands and appropriate
communication with the consumer. Because we are talking about a dynamic and competitive
market at the same time, keeping strong brands associated with an alert lifestyle becomes a
condition for the success of Kinder
 REFERENCES

 Maketing’s Management; Philip Kotler,Kevin Lane Keller

 www.ferrero.com
 www.facultate.regielive.ro
 www.kinder.ro
 www.nestle.ro
 www.satndard.ro
 www.revista-piata.ro
 www.zf.ro
 www.kraftfoodscompany.com
 www.iqads.ro
 www.kandia-excelent.ro
 www.romautentic.ro