Case Study Darling Chocolate Essay
Case Study Darling Chocolate (Group 7)
1. The population is very huge in St. Petersburg and therefore there is high sales potential. The population has experienced improvements in living conditions and material well-being; however the standard of living was not that high and incomes are still very low. The annual average growth of income was 23% and average annual inflation rate was only 12%. The average spending on food is about 56% of family budget. Only 2% of monthly expenditures for food are spent on chocolate and candy. Due to several reasons the attitude of Russian consumers is more or less negative towards imported (foreign) products. They perceive that domestic products are at least as good as foreign products. So, …show more content…
2. It seems to be very difficult to succeed as a foreign company in the Russian market, because customers are quite price sensitive and focused on domestic brands. Therefore, we recommend entering the market with chocolate bars first in order to create higher brand awareness due to higher sales in volume. With those products the company has lower costs for production, experiences economies of scale and can offer lower selling prices. Additionally, the heavy users which spent the most amount of money on chocolate are targeted with this strategy. Besides, customers rely on opinions of others word-of-mouth advertising could be a benefit. Finally, an aggressive and huge advertising campaign is useful. After having brand awareness, the introduction of higher priced (luxury) chocolate could be easier.
However, a good quality is necessary.
3. The most appropriate customer is the Heavy User, because those people are buying chocolate continuously and spontaneously. More or less, the younger and mid-aged target group should be the aim, because older people rely on their experience and are very loyal to domestic products.