Marketing Plan Marketing Plan

Thornton’sThornton’s

ByBy

Hamad AslamHamad AslamA4016815A4016815

LSBF MBAMarketing Management

Introduction to Thornton'sIntroduction to Thornton's Thornton’s is a UK based Thornton’s is a UK based chocolatechocolate company  company

established by established by Joseph William ThorntonJoseph William Thornton in 1911. in 1911. Thornton’s today is a £180 million turnover company Thornton’s today is a £180 million turnover company

with nearly 400 shops and cafes and around 200 with nearly 400 shops and cafes and around 200 franchisesfranchises together with internet,  together with internet, mail ordermail order  and   and commercial services. commercial services.

Continental and Special Continental and Special ToffeeToffee account for almost  account for almost £80 million of Thornton's sales and are often cited as £80 million of Thornton's sales and are often cited as two of the favourites among the Thornton product line. two of the favourites among the Thornton product line.

Introduction continue…Introduction continue…

Thornton’s continues to have a seasonal Thornton’s continues to have a seasonal business however but the peak seasons are very business however but the peak seasons are very large the year started with Valentine's Day, large the year started with Valentine's Day, followed by Mother’s Day, Easter remains a followed by Mother’s Day, Easter remains a peak period for the business.peak period for the business.

Advertising slogans have included:” Chocolate Advertising slogans have included:” Chocolate Heaven Since 1911" and "The Art of The Heaven Since 1911" and "The Art of The Chocolatier".Chocolatier".

Reason to choose Thornton’sReason to choose Thornton’s

Sales at Thornton’s own stores fell by 6.2 per cent to £17.5 Sales at Thornton’s own stores fell by 6.2 per cent to £17.5 million, significantly worse than the 4.9 per cent drop reported in million, significantly worse than the 4.9 per cent drop reported in the third quarter and the 4.5 per cent fall in the second. the third quarter and the 4.5 per cent fall in the second.

In the full year own store sales were down 3.6 per cent to £129.8 In the full year own store sales were down 3.6 per cent to £129.8 million.million.

Total retail sales were down 3.6 per cent to £20 million in the Total retail sales were down 3.6 per cent to £20 million in the final quarter, an improvement on the falls of 4.7-4.9 per cent in final quarter, an improvement on the falls of 4.7-4.9 per cent in the previous two quarters. the previous two quarters.

In the full year total retail sales were down 3.7 per cent to £152 In the full year total retail sales were down 3.7 per cent to £152 million.million.

Thornton’sThornton’s is cutting 35 head office jobs as sales of its is cutting 35 head office jobs as sales of its chocolates continued to decline chocolates continued to decline 14, JULY201014, JULY2010

Proposed Marketing Plan Model Proposed Marketing Plan Model SOSTACSOSTAC

The SOSTAC model and associated methodology are The SOSTAC model and associated methodology are now used by blue chip corporations around the world now used by blue chip corporations around the world and also by many smaller businesses and organisations. and also by many smaller businesses and organisations.

Situation analysisSituation analysis ObjectivesObjectives StrategyStrategy TacticsTactics ActionAction ControlControl

Situation AnalysisSituation AnalysisStrengths:Strengths: Manufacturing: Manufacturing: Thornton’s Plc conducted their key manufacturing and Thornton’s Plc conducted their key manufacturing and

selling activities in house. selling activities in house. Quality: Quality: The use of quality material and ingredients assured the quality of the The use of quality material and ingredients assured the quality of the

boxed chocolate selection. boxed chocolate selection. Brand Name: Brand Name: Thornton’s has become a well known brand to the consumers. Thornton’s has become a well known brand to the consumers. Products: Products: In 1925 a recipe for Special Toffee gave the business an In 1925 a recipe for Special Toffee gave the business an

outstanding product. Walter Willen created the original recipes for outstanding product. Walter Willen created the original recipes for Thornton’s Continental chocolate rangeThornton’s Continental chocolate range

Technology: Technology: In 1998 the company had started to install EPOS in the shops. In 1998 the company had started to install EPOS in the shops. Wide Distribution Channel: Wide Distribution Channel: Thornton’s have their own shops to sell their Thornton’s have their own shops to sell their

products. Besides that, they have collaborated with other retail outlets such as products. Besides that, they have collaborated with other retail outlets such as Marks and Spencer, Tesco and also other grocers in order to widen and Marks and Spencer, Tesco and also other grocers in order to widen and strengthen their market distribution channel. strengthen their market distribution channel.

Situation AnalysisSituation AnalysisWeaknesses:Weaknesses: Short Lifespan of Product: Short Lifespan of Product: Thornton’s’ chocolate does not have a long Thornton’s’ chocolate does not have a long

shelf life. shelf life. Fluctuations of Demand: Fluctuations of Demand: The Company faces a lot of pressure and The Company faces a lot of pressure and

fluctuations of demand due to strong seasonal pattern. fluctuations of demand due to strong seasonal pattern. Extra Cost of Labour: Extra Cost of Labour: To meet seasonal demand packing staff requires the To meet seasonal demand packing staff requires the

increased use of casual workers, which will lead to a fall in efficiency. increased use of casual workers, which will lead to a fall in efficiency. Packaging: Packaging: The chocolates are enrobed in chocolate rather than moulded. The chocolates are enrobed in chocolate rather than moulded.

Thus, their hand made appearance makes the packaging process less open to Thus, their hand made appearance makes the packaging process less open to automation because the chocolates are not in uniform sizes. automation because the chocolates are not in uniform sizes.

Customers’ Expectation: Customers’ Expectation: Franchising did not provide the customer with the Franchising did not provide the customer with the same experience as shopping in a Thornton’s-owned shop and occasionally it same experience as shopping in a Thornton’s-owned shop and occasionally it could be difficult to maintain standards. As a result of this, Thornton’s could could be difficult to maintain standards. As a result of this, Thornton’s could end up losing customers because they cannot meet the customer’s end up losing customers because they cannot meet the customer’s expectation. expectation.

Situation AnalysisSituation AnalysisOpportunities:Opportunities: Use of Technology: Use of Technology: Thornton’s have also made use of the internet to let Thornton’s have also made use of the internet to let

customer’s place their orders or make online purchases, retain existing customer’s place their orders or make online purchases, retain existing customers and also attract new customers. Besides that, online purchases can customers and also attract new customers. Besides that, online purchases can allow them to receive information quickly and determine whether certain allow them to receive information quickly and determine whether certain products are favourable or unfavourable to the consumers. products are favourable or unfavourable to the consumers.

Penetration to European Market: Penetration to European Market: Thornton’s expanded their business Thornton’s expanded their business thorough the acquisition of Gartner in Antwerp, which was their first thorough the acquisition of Gartner in Antwerp, which was their first European acquisition. European acquisition.

Seasonal Sales: Seasonal Sales: Thornton’s chocolates are highly dependable on seasonal Thornton’s chocolates are highly dependable on seasonal festivals. This way, when festive seasons arrive, the sales will boom and will festivals. This way, when festive seasons arrive, the sales will boom and will increase the profits. increase the profits.

Export to Other Foreign Markets: Export to Other Foreign Markets: Thornton’s began to develop sales Thornton’s began to develop sales outside UK by exporting to Europe and Australia which had reached 300 outside UK by exporting to Europe and Australia which had reached 300 thousand pounds. Export to these foreign markets will increase production thousand pounds. Export to these foreign markets will increase production and could achieve economies of scale. and could achieve economies of scale.

Situation AnalysisSituation AnalysisThreats:Threats: Competition Against Established Companies: Competition Against Established Companies: When When

Thornton’s wanted to attract a wider range of customers, they Thornton’s wanted to attract a wider range of customers, they entered into the middle range market. The expansion of the entered into the middle range market. The expansion of the target market has leaded them into competition against target market has leaded them into competition against established companies such as Nestle and Cadburys. established companies such as Nestle and Cadburys. External External Factors: Factors: During Easter2003 Thornton’s sales were affected by During Easter2003 Thornton’s sales were affected by the hottest summer in 30 years. In June 2003, it revealed that the the hottest summer in 30 years. In June 2003, it revealed that the companies own stores sale had increased by only 0.9%. This companies own stores sale had increased by only 0.9%. This shows that the sales of Thornton’s will be affected by external shows that the sales of Thornton’s will be affected by external forces such as weather.forces such as weather.

Other Substitutes: Other Substitutes: Thornton’s competed with a wide range of Thornton’s competed with a wide range of products ranging from 5 to 10 pounds. Specialist retailers such as products ranging from 5 to 10 pounds. Specialist retailers such as Body Shop and Knickers Box provided gifts in the same price Body Shop and Knickers Box provided gifts in the same price range. range.

Objective of the Thornton’sObjective of the Thornton’s

I propose the objective of the company should I propose the objective of the company should be like “be like “We want as many as possible people We want as many as possible people to enjoy our mouth-watering chocolates and to enjoy our mouth-watering chocolates and we like to offer a wide range of products for we like to offer a wide range of products for all categories of people”.all categories of people”.

Proposed StrategyProposed Strategy

I propose the strategy of I propose the strategy of “product “product development and diversification using development and diversification using strong brand name”.strong brand name”.

By implementing this strategy company can By implementing this strategy company can expand their channels of distributions to expand their channels of distributions to increase its market share.increase its market share.

Company can expand its product line as ice Company can expand its product line as ice cream, liqueurs, sauces and juices are seen as the cream, liqueurs, sauces and juices are seen as the most likely means of generating future growth.most likely means of generating future growth.

Tactic's using 7p’sTactic's using 7p’s

Product:Product: The product should be company’s The product should be company’s luxury Chocolatesluxury Chocolates

brand which includes:brand which includes: Chocolate blocks Chocolate blocks ContinentalContinental Dessert GalleryDessert Gallery MomentsMoments ClassicsClassics Organic chocolatesOrganic chocolates No added sugar diabeticNo added sugar diabetic

Price Price

Thornton’s has very best quality of products as Thornton’s has very best quality of products as compared with its competitors, but as I know the compared with its competitors, but as I know the market situation is very unfavourable if we put higher market situation is very unfavourable if we put higher prices in the start for these kinds of products. Quality is prices in the start for these kinds of products. Quality is a competitive advantage but their competitors offering a competitive advantage but their competitors offering chocolates on lower prices like Cadbury. Therefore I chocolates on lower prices like Cadbury. Therefore I will propose the pricing strategy will propose the pricing strategy “Penetration “Penetration Pricing”.Pricing”. I would like to provide the people high I would like to provide the people high quality at lower prices. quality at lower prices.

£ 4.75 for 100gm£ 4.75 for 100gm £ 7.75 for 200gm£ 7.75 for 200gm £ 9.75 for 300gm£ 9.75 for 300gm

PlacePlace

Product will be placed and sold through;Product will be placed and sold through; company own storescompany own stores company’s franchises company’s franchises company’ website (Direct)company’ website (Direct)

PromotionPromotion

““one more bite”. one more bite”. This would be the slogan of the This would be the slogan of the company. This product will be promoted through the company. This product will be promoted through the following marketing communication mix channel.following marketing communication mix channel.

Advertising: Advertising: This product will be advertise through This product will be advertise through TV, Clear channel Bill Boards and through advertise TV, Clear channel Bill Boards and through advertise in the News Papers like in metro.in the News Papers like in metro.

Direct Marketing:Direct Marketing: The second way of advertising this The second way of advertising this product will be the direct marketing through internet product will be the direct marketing through internet and information displayed in the stores.and information displayed in the stores.

People People

People refer to the customers, employees, management People refer to the customers, employees, management and everybody else involved in it. It is essential for and everybody else involved in it. It is essential for everyone to realize that the reputation of the brand that everyone to realize that the reputation of the brand that you are involved with is in the people's hands. you are involved with is in the people's hands. In our In our company I will consider people the employee’s of company I will consider people the employee’s of the Thornton’s. Like;the Thornton’s. Like;

Sales AssistantsSales Assistants SupervisorSupervisor ManagerManager Territory ManagerTerritory Manager Area ManagerArea Manager

Budget Budget

Assume that the company net profit for the last Assume that the company net profit for the last year 2009 is £300million. I will take 33% of the year 2009 is £300million. I will take 33% of the net profit as a budget for year 2010 which is net profit as a budget for year 2010 which is £100million. £100million.

90% for Advertisement on Charismas, New 90% for Advertisement on Charismas, New year, Easter, Mothers Day, Fathers Day.year, Easter, Mothers Day, Fathers Day.

10% for Direct Marketing.10% for Direct Marketing.

Process Process

Means the system use to assist the organization Means the system use to assist the organization in delivering the services. In our case Thornton’s in delivering the services. In our case Thornton’s using very simple processes.using very simple processes.

Do shoppingDo shopping Pay at tillPay at till Simple Processes in the shopSimple Processes in the shop

Physical EvidencePhysical Evidence

Clean shopClean shop Clean Uniform of staffClean Uniform of staff Display Information inside the storeDisplay Information inside the store Appearance of inside and outside of storeAppearance of inside and outside of store

Learning OutcomesLearning Outcomes

Company should do merger with any reputable Company should do merger with any reputable retail company like Tesco or M&S.retail company like Tesco or M&S.

They should do diversification and Product They should do diversification and Product development.development.

Target the market by offering products to every Target the market by offering products to every age group.age group.

Use of technologyUse of technology