First Asia Institute of Technology and Humanities Pres.

Laurel highway, Tanauan City, Batangas School of Technology Industrial Engineering

Case 5: Rogers Chocolate

Submitted by: Esguerra, Mark E. And Pamlona Darla Submitted to: Engr. Darwin R. Gevana

December 5, 2011

OVERVIEW Premium Chocolates are like Imported Roses which not consider necessities for one life. People love to have or get one of those products. However, if there isnt a special occasion or surplus cash, some people will not buy that unnecessary stuff. In Canada, premium chocolates were growing at 20 percent annually and the Canadian market size for Chocolates was US$ 167 million in 2006. An attractive growth from premium chocolates makes the current player like Rogers Chocolates, Purdys and others are thinking new strategies to expand market. In addition, some big traditional manufacturers like Hersheys and Cadbury are also very interested and keen to enter this segment (Zietsma 2007). Rogers Chocolates is a king in Victoria and well known in British Colombia. However, outside this area the brand awareness is still low. The new appointed CEO is being targeted to double or triple Sales in ten years. The key successes in premium chocolates are: understand the consumers needs, brand awareness, diversified products and enhanced competitiveness. There are many challenges for Rogerss chocolates to grow in this ever-growing competition, and there are many old and new strategies that havent been proven effectively. Moreover, Rogers is small/medium Company that has limited resources to apply all those strategies. The management decision-making will be very crucial to manage its strength and weakness while at the same time; they have to overcome the threat and opportunities in the industry.

ROGERS CHOCOLATES HIGHLIGHTS Rogers Chocolates is one of Canadas premiere chocolate makers. In 2006 the

Canadian market size was $167 million annually Growth rate of the Canadian Premium Chocolate market is expected to rise 20%

annually vs.Traditional Chocolates growth rate of 2% annually Sales in the 8 weeks prior to Christmas roughly equaled 25% of chocolate sales

and 20% of heavy users accounted for 54% of the pre-Christmas sales in 2006. Focus on appropriate target market to achieve maximum awareness and brand recognition Continue to fulfill its commitment by participating in recycling and reducing

emissions as part of a commitment to sustainability. Rogers good corporate social practices will also focus on human rights,

packaging, procurement and operational decisions. Rogers performance over the last two years confirms that sales have remained

stagnant and had a better ROI in 2006 than it does now.. Rogers will seek out partnerships or collaborators such as the 2010 Vancouver

Olympics and reach consumers on a global level. team Rebrand their traditional images to inspire new client base to try their products. Restructure retail shops with lower contribution margins Create retail experience around rich tradition and history, production and quality. Deliver unique retail experience Generate sales of at least $17,000,000 by 2017 Rogers will re- structure its management team to a more efficient & cohesive

Increase brand awareness in Canada by 50% and retail locations by 2017 Increase online sales to $1.1 million by 2017 Keep existing and loyal customers satsifeid with customer rewards and

promotions Promote, Promote, Promote: Chocolate of the month clubs, special occasion gifts

(graduation, Fathers/Mothers Day, Anniversaries, Teacher gifts, etc).

ROGERS CHOCOLATES VISION/MISSION: Rogers' Chocolates is committed in producing and marketing fine products which reflect and maintain our reputation of quality and excellence established for over a century. All aspects of our business will be conducted with honesty and integrity, upholding our proud Canadian tradition. (Rogers Chocolates 2010) To double or triple total sales within 10 years INTERNAL/EXTERNAL ANALYSIS: Strengths: y y y y y y y y y y y Product Established brand Quality & taste Award-winning Variety Human Resources Employee pride and loyalty Skilled and experienced management Rogers own retail stores Sams Deli Performance Strong financial position

Weaknesses: y y y y y y y y y y y y y y y y y y Product/Brand Little awareness outside Victoria Production Planning, Documentation and Forecasting Suppliers Capacity Equipment and processes Human Resources Resistance to change Conflict management Multiple responsibility Sales force Distribution Location Market Coverage Inventory management Financial Sales growth

Opportunities: y y y y y y y y y Market Tourist approach in cruise ship Growing Markets 20% annually Young people market USA and International Market 2010 Olympics Licensing, Franchising and partnership Products: Ice cream

y y y y y y y y

Health conscious products Consumer Trends Affordable luxury products Healthy lifestyles Technology Mobile marketing Production capabilities Internet

Threats: y y y y y y competition and new entrants Economic Downturn/ Drop tourists Change consumer traffic to Vancouver Private label Chocolate Fluctuating demand Environmental and human concerns

STRATEGIC IMPLICATIONS: Rogers target market is both end users and consumers who buy chocolates to indulge themselves or to give as a gift. Rogers target buyers are new and existing chocolate buyers that love quality chocolates. Demographics tend to be mainly women ages 25-55 years old with middle to high household income of $50,000 upward. They generally have college education and are professionals, white collar workers, managers, or owners. The majority will be frequent travelers and internet users. A niche differentiator strategy will be employed to differentiate the new Rogers brand image in Eastern Canada and US. To drive internet sales, Rogers will promote the website benefits of convenience and fast delivery. More attention to Rogers retail shops will be pursued in order to get that exclusivity feel. Sams Deli will

The key to this strategy and marketing plan will revolve around raising brand awareness. Partnership and collaborations are a critical way to raise awareness such as sponsoring an Olympic event/athlete (ice skating) as the Olympics are scheduled to be in Vancouver in 2010. BUILDING AWARENESS The most productive and efficient way to build awareness is to increase online sales which will increase market exposure. In addition, corporate sales and partnership will generate much needed awareness in these sectors that will compliment the online campaign. Rogers will position itself as a company that values their customers both online and in their retail shops. A new easy to use and interactive website will be introduced to establish the new and improved Rogers Chocolate line. Samples will always be available in the retail shops and stores will feel like your in chocolate heaven. BUDGET A generous budget of approximately $2 million will be provided and supplemented by a price increase of about 5%. Small wholesalers will be reduced and scaled back while Sales Agents will be re-trained to focus on the big picture (corporate events, sponsorship). 50% of the budget will be directed toward Brand Awareness; 25% of the budget will be directed toward rebranding the new face of Rogers Premium Chocolates; 15% of the budget will be utilized to update the website 10% of the budget will be spent on promotions

STRATEGY SELECTION: Based on Rogers goal of doubling or tripling total sales within 10 years, then the main strategy will be increasing brand awareness. Rogerss products are already proven superior despite their distribution which circulates mainly in British Colombia area, thus company has to expand its market range to greater area and to East Canada or overseas. Rogers has already won the 2010 Olympics Official Chocolates together with Purdys (Lazarus 2008) which is a tremendous opportunity to create awareness nationally and internationally. To grow a market, factors such as Licensing, franchise and partnership is being considered. One idea under consideration for developing the wholesale network was the creation of a turnkey store-within-a-store setup that would allow wholesale clients with a retail presence such as department stores to add a mini-Rogers store in their shop. Rogerss management also aim to increase the number of online shopping. Those strategies are consistent with Rogerss goal to increase the sales by double and triple in ten years. However, being a small/medium company, Rogerss management can only choose to act on several options while not putting a risk on its culture and tradition.

RECOMMENDATIONS: y y y That the company focus on Internal Operations before expanding Highest priority should be given to Production problems The Company should be encouraged to examine which of its production techniques are adding value and which are inefficient.

REFERENCES: Thompson, A.A, Jr., Strickland III, A.J., & Gamble, J.E.(2009). Crafting and Executing Strategy (7th ed.) New York: McGrow-Hill/Irwin.