Le Whif in the US MarketMKTG 3040

May 6, 2010

Agenda

Company Background

Defining Market

Segments

Primary Research Methods

Key Segment Insights

Marketing Strategy

Questions

• Invented by Harvard Professor, David Edwards in January, 2010•Released in Paris initially and launched globally last spring in select stores across the world, currently sold online, and soon to be released for US retail•Le Whif has made the front page of newspapers in 19 different countries

Le Whif Background- Secondary Research

Le Whif Background- Secondary Research

"Le Whif uses particle engineering to form chocolate in particle sizes that are small enough to become airborne though too large to enter the lungs,” - Professor Edwards

Le Whif is an inhalable form or chocolate that gives consumers the taste of chocolate with less than one calorie.

Le Whif is packaged in small tubes the size of a lipstick and is usually in packages of 3 tubes. Each tube holds about 3 “whifs”.

Available in flavor varieties such as raspberry chocolate, mint chocolate, and a new coffee flavor, which is caffeinated.

Current Situational Analysis

• Recently released in Boston• Prospective strategy to utilize a “franchise

model” on college campuses with students as ambassadors (John Staff)• Plan pushed back to the fall• High novelty purchase

Problem:People don’t like the product because they don’t understand what it is an

where it fits into their life.

Market Segments

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Females age 26-55 yrs•Consider themselves health conscious•Majority have tried low calorie food snacks•Quality is most important attribute of food•Median Household Income: $76,680•Already have or progressing towards a “fast-track family”

Females age 18-25 yrs•Consider themselves image conscious•Live a fast-paced lifestyle•Price is the most important attribute when buying food•Disposable income of $200/month•Spend just 59% as much as the average household

Primary Research: In-Depth Interviews

•3 Young Experiencer Females

•3 Health Conscious Adult Females

Interviewed Subjects from 2

Segments

•23 free response questions

•Probed subjects for thoughtfulness

Formatting the Interview

•Key insights

•Making use of the qualitative data

Exploring the Results

Primary Research: In-Depth Interviews

Susan Dordal- 21• “If it’s not something that a lot of people have, I want it. If it’s harder

to find, I want it more.”

Elaine Nelson- 46• “It would be great for women always on a diet.”

Casey Smart- 21• “I saw it on The Today Show…seems hokey, but I am intrigued. I am

always looking for diet things.”•

Maryanne Fortuna- 40•“It’s just a tease. It’s like going into a room and smelling baked cookies but there are no cookies.”

Primary Research: Survey Design

• Survey design– 13 questions– Variety of Likert, categorical,

ordinal and numerical questions

– Launched for two weeks on Qualtrics

• Respondents: 235– 173 Young Female Segment– 47 Adult Woman Segment

• Statistical Data Analysis

Data Analysis

Null: The mean agreement with the statement “Image is important to me” for our young segment is neutral.*Coding: 1= Strongly disagree, 5= Strongly agree

t-Test: Paired Two Sample for Means

Image NullMean 3.797687861 3Variance 0.673948111 0Observations 173 173Pearson Correlation #DIV/0!Hypothesized Mean Difference 0df 172t Stat 12.78035168P(T<=t) one-tail 5.01324E-27t Critical one-tail 1.65376095P(T<=t) two-tail 1.00265E-26t Critical two-tail 1.97385213

Result: Since the p-value 5.01324E-27 is significantly less than the p-value of 0.05, we reject the null hypothesis. The mean agreement with the statement "Image is important to me." is significantly different than neutral. Thus, image is important to our younger segment.

Null: The agreement with the statement “I live a fast paced lifestyle” for our young segment is neutral.*Coding: 1= Strongly disagree, 5= Strongly agree

t-Test: Paired Two Sample for Means

Fast Paced NullMean 3.901734104 3Variance 0.786799301 0Observations 173 173Pearson Correlation #DIV/0!Hypothesized Mean Difference 0df 172t Stat 13.37117473P(T<=t) one-tail 1.01874E-28t Critical one-tail 1.65376095P(T<=t) two-tail 2.03749E-28t Critical two-tail 1.97385213

Result: Since the p-value 1.01874E-28 is significantly less than the p-value of 0.05, we reject the null hypothesis. The mean agreement with the statement "I live a fast paced life." of respondents within our younger segment is different than the neutral value of 3. In fact it is slightly greater at 3.901734101. Thus, our young segment believes they live a fast paced life.

Consumer Behavior Concepts

Taxonomic categories are necessary for consumers to identify product and its usage.

Consumers are influenced by four social forms

Primary demand is a consumer indentifying a need for the first time

Selective demand is a consumer identifying a solution to a need

Marketing Mix: Young ExperiencersPrice

$2.50

•86.7% ranked price as first or second priority when purchasing food item

•61.5% of people who stated they were interested in Le Whif also said they would be willing to spend $3.00 for it

•Increased trial of the product, more people who are interested in the product would be willing to buy it, and those who originally said they would pay $3.00 for it will perceive it as a value

“I think I would try it. I would only make the switch if it wasn’t a huge price difference.” Alex Baldwin

Marketing Mix: Young ExperiencersProduct

Coffee Variety

•All the caffeine of a double shot of espresso

•Mean interest in Le Whif chocolate was less than neutral (1 or 2 on a 5 point scale)

•28 of 99 who were not at all and not very much interest in Le Whif were interested in the Le Whif coffee variety, which is in addition to those who are interested in both

•Young Experiencers who expressed interest in Le Whif consider image to be important

•Motivation• Utility of fast and easy caffeine source and

novel coffee experiencewww.lewhif.com

Marketing Mix: Young ExperiencersPlace

Local and independent cafes, bakeries, and coffee shops; specialty grocers

•Place the product in locations that this segment views as upscale, but not novelty

•Places that have a similar hip vibe as an art museum gift shop or novelty item store, yet are habitually visited by our segment

•Examples around Minneapolis: Café Latte, Bread and Chocolate, Turtle Bread, and Zeno

•Specialty Grocers such as Trader Joe’s allow for access to the product and wider exposure while still maintaining its image as a premium product.

Marketing Mix: Young ExperiencersPromotion

Personal Non-Marketer Focus

•93% of respondents ranked family and friends as the first or second most important source of information about new products.

•Generate Buzz • Create positive word of mouth about the product

• Trial booths and Sponsorships • Events such as fashion shows, film festivals,

gallery openings, etc. on large and small scales.

•News sources and other mass non-marketer sources were ranked second for new product information

Ex: Fashion Show

Marketing Mix: Health Conscious AdultPrice

$2.50

•The second most important attribute for this segment behind quality is price.

•Price Le Whif as something affordable, yet high enough to signal quality.

•$2.50 was affordable, yet high enough to signal quality to our Health-Conscious Adults, without alienating our Young Experiencers by being priced too high.

Maryanne Fortuna, stated that she would spend two to four dollars an upscale chocolate

Marketing Mix: Heath Conscious AdultProduct

Chocolate flavor; positioned as a low-calorie indulgence

•100% of the women who stated they were interested in Le Whif indicated that calorie content was an appealing product feature.

•59.57% of our respondents indicated having tried low-calorie diet options

•Motivation• You get a good, flavorful desert

but you don’t have to worry about the calories

Marketing Mix: Heath Conscious AdultPlace

Specialty upscale grocers; department store market places

•Specialty grocers such as Lund’s and Byerly’s or Kowalski’s (for MN)

•Quality is most important to this segment when purchasing a food item

•59.57% of our respondents in this segment indicated having tried low-calorie diet options

•Position it with other premium health and wellness gourmet food items (Luna Bars, Balance Bars, Fruit Leather, Kashi items, etc.)

Marketing Mix: Heath Conscious AdultPromotion

Mass Non-Marketer Focus

•Health Conscious Adults ranked friends and family as the most important influence when purchasing a new product.

•Generate buzz• Emphasize mass non-marker influence through

opinion leaders that this segment looks to, such as Oprah.

•Feature product in popular media• “O” magazine, and on daytime talk shows such as

Regis and Kelly or The View.

•Conduct product demos/ trials• Within upscale grocery stores, malls

“O” The Oprah Magazine

Questions?