Lindt Chocolates Marketing Campaign

Table of Contents:

Executive Summary Situation Analysis Marketing Goals Target Audience Creative Media Objectives & Goals Media Strategy Media Execution Budget Team Biographies Appendix

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Lindt Chocolates - Marketing Campaign Executive Summary

Lindt is an established gourmet chocolate company. In 1847, in the town of Zurich, Switzerland, its original chocolate factory was formed. Today Lindt aims to provide not just a treat, but bu t a  piece of refined chocolate perfection. Within the next few years, chocolate sales are projected to rise by two to three percent per year. In the next three years, Lindt wants to raise its distribution from 70 percent to 90 percent percen t and  brand awareness by ten percentage points, from 25 percent to 35 percent. To achieve these goals, Lindt wants to shift their approach from distribution to brand awarene ss. Lindt has allocated $30 million to achieve these goals. Our advertising team will run a pulsing campaign, concentrating on advertising during the holiday months: February, April, November, and December, when chocolate is used more abundantly. We will predominantly focus on the national markets with supplemental five spot markets. We’re targeting white 45-54 years old and Asian 18-22 women. We will use both traditional and nontraditional methods to better advertise to these business and family oriented women. The media chosen to reach these target audiences will be national magazine publications, television, Internet, and outdoors. We decided to use a variety of media to obtain a reach of 70 and the most effective frequency of 3.3 calculated from the Ostrow Ostrow Model. The total budget of $30 million from was split into about $29.7 million in traditional advertising and $300 thousand nontraditional and promotional methods.

Situation Analysis

Historical Perspective In 1847, in the town of Zurich, David Sprungli and his h is son, Rudolph, built a factory that  produced chocolates in solid form. Years later, Rudolph divided the business he had started with his father amongst his two sons. The elder son, Johann Rudolf Sprungli, was given the factory and the younger son was given two retail stores. Johann changed the name of his private company to Chocolate Sprungli and acquired the Lindt chocolate factory in Berne, Switzerland, in effort to expand his business. The company again converted its name to be, “United Bern and Zurich Lindt & Sprungli Chocolate Factory Ltd.” Starting in the year 1994, Lindt began to acquire various chocolate companies. Kufferle Chocolate was the first chocolate brand to be integrated into the new business and within the next four years, Caffarel and Ghiradelli were inherited as well. At one time, Ghiradelli was a one-regional company, but after Lindt & Spungli inherited it, it was expanded to many international markets. Lindt & Sprungli currently has six factories that are located loca ted in Kilchberg, Switzerland; Aachen, Germany; Oloron-Sainte-Marie, France; Induno Olona, Italy; Gloggnitz, Austria; and Stratha,  New Hampshire. In 2011, Lindt’s net profits were recorded as 4.7 million and its market share rose to 29 percent. The year 2011 exceeded all previous years. In 2014, Lindt bought another company, Russell Stover Candies, for about $1.5 billion. There are currently eight Lindt chocolate cafés in the world, four of which are in Sydney and four in Melbourne, Australia. In 2009, because bec ause of a stagnant economy, Lindt closed half of its 80 retail boutiques in the United States. Today, however, Lindt has 59 cafés ca fés and 28 markets in the United States, primarily in the northeast. Lindt Chocolate today offers handmade chocolates, macaroons, cakes, and ice cream. The Market In order to accurately describe the full market spectrum for Lindt chocolates within the United States the markets must be broken into national and spot markets. On a national level, chocolate choc olate sales are expected to increase by 2-3% per year. This is great for the category, however, if Lindt is to gain a larger portion of that increase it will need to increase its awareness, currently around 25%, within the market. There are over 200 different chocolate choco late candy bar brands each competing for their share of increase and growth, those with stronger  brand recognition will benefit year after year. Luckily, Lindt does have its niche market of

gourmet chocolates that gives it an advantage over other brands; the ubiquity of this fact simply needs to be spread throughout all 50 US states. Lindt has been employing a push strategy placing  products in large retail outlets, but is only inside of 70% of the 35,000 supermarkets and 149,000 convenience stores throughout the US. The spot market analysis covers the top ten, out of 28, markets Lindt has h as classified as their “Cafe Cache.” These markets include Boston, New York City, Portland, Philadelphia, Albany, Chicago, Minneapolis, Burlington, Miami and Orlando. According to proprietary tests conducted  by Lindt, brand awareness increased by 20% and sales increased by 5% within the test markets. Past and Current Advertising Throughout the history of Lindt’s advertising they have always tried to position themselves as excellent chocolate makers and that there product is more art than food. They strive for elegance and beauty in a lot of their TV spots by using warm colors and an d a slow speaking spokesperson. In there print media they strive for a sleeker look and use many black and red backgrounds. Lindt however has not shied away from humor in there commercials with Roger Federer a professional tennis player who has his bag full of lindt chocolate “confiscated” by airport security because the guards want it for themselves. Currently Lindt is running a commercial focusing on how their chocolate will make women melt. Their current tagline is “Chocolate beyond compare.” Competition Lindt’s three highest competitions are, respectively, Hershey Co, Mars Inc, and Ferrero Spa. Hershey’s spends the largest amount of money on their chocolate bars and candy. Their main advertising expenditures go to Rises, KitKat, Payday, Hershey’s kisses, and Hershey’s candy  bar. Their total monthly expenditure amounts to $355,966,122, spending the most on Hershey’s candy bar and Hershey’s kisses. Mars Inc is Lindt’s second largest competitor, with total monthly advertising expenditures of $329,385,948. Most of Mars Inc’s advertising is allocated to: M&M’s, Snickers, Twix, and Milky Way. Ferrero Spa is not as big of a competitor compe titor as Hershey’s or Mars Inc. It advertises for only two chocolates, Ferrero Ro cher and Kinder candy  bar, with a total monthly expenditure of $14,270,072. SWOT Analysis Strengths Lindt has a vast variety of products produc ts from which their clientele can choose from chocolate ch ocolate balls to holiday themed chocolate, including bunnies, bears, reindeers, and bells. Lindt specializes in luxury gourmet chocolate with excellent chocolate c hocolate bars of many flavors. Its focus on premium  product development and quality control has ensured a Lindt to sell a better product than most of its competitors. Regionally, Lindt has six different factories and eight different chocolate cafes

around the world. Lindt has developed a strong distribution with a market share that has risen 29% in the past few years. Weaknesses Lindt hasn’t yet established strong brand awareness. Lindt isn’t a well-known brand that the masses recognize. Additionally, Lindt spends far less than its competitors do on advertising. Moreover, Lindt’s retail boutiques have suffered due to the recession in the U.S. Opportunities Lindt has the opportunity to grow within the United States, outside of their leading region, the  Northeast. It has the opportunity to grow brand awareness both nationally and regionally. The chocolate economy is projected to grow; therefore it’s not a dying category. Threats To achieve its plans, Lindt has to compete with other well-known brands such as Mars, Hershey,  Nestle, Toblerone, Cadbury, Godiva, and many more. Overall, there are over 200 brands that  produce chocolate candy bars. Marketing Goals

Within the next few years, the total chocolate sales are projected to rise by 2-3% per year. Lindt wants to make the most of this upturn in the next 3 years, starting with upping up ping the distribution from 70% to 90% and growing brand awareness by 10 percentage points (from 25% to 35%). To achieve these goals, Lindt wants to shift their approach from distribution to brand awareness. They especially want to concentrate on the “Café Cache,” which is locating their product in metro markets that has shown to be beneficial in their test with 20% increase of higher b rand name recall and 5% in sales. Lindt allocated $27 million to achieve those goals. 70% 90% Distribution 25% 35% Brand Awareness Passion For Premium Chocolate Target Audience

Primary Target Audience Meet Betty. Betty is 47-year-old Caucasian who lives in Massachusetts with her husband and a 14-year-old daughter. She is a businesswoman, working on a managerial position and earning an income of $75,000+ a year.

She is very organized and task oriented, but spending time with family is most important for her. Betty cares for her loved ones and likes to shower them with gifts. She cares c ares deeply about the environment and lives a religious life. Betty enjoys freedom, nature, creativity, and curiosity. She likes to learn about other cultures and is politically involved in her community. Since she is always in a hurry, she enjoys the small pleasures. She is looking for excitement and an d simplicity, something that would make her everyday ev eryday routine easier and more involving. Betty eats healthy, organic foods that are a re nutritious and give her the opportunity opp ortunity to experiment in the kitchen. She uses food as a comforter and is willing to spend more money for better quality. Before buying anything, Betty does a thorough research by reading reviews and comparing  prices on different sites or stores. She is willing willing to make purchases online if it’s easy and convenient. She prefers getting samples to sale opportunities. Betty stays connected to her mobile device. She doesn’t watch TV unless it’s her favorite TV show, Once Upon A Time, awards, or popular sport tournaments like Tour de France, World Cup Soccer, and Wimbledon. She keeps up to date with the news. In her free time, she likes to read. Her guilty pleasures are magazines like People, Good Housekeeping, and Bon Appetite. Secondary Target Audience Welcome Yoshiko, a 22-year-old Asian woman who just had her first baby boy. Yoshiko brings in with her husband an income of $60,000 a year. She lives in San Francisco. She graduated from college and is starting her new career ca reer as an assistant manager in administrative support center. Consumer Insights Primary Audience Our primary audience are white women ages 45-54. They have a post-graduate education and work primarily within the management business and financial operations. They make $75,000 + a year. They are married and have one child between 12-17 years old. Those women care both about their family and career life. Ages 55-64 had a higher index number, but their children would be old enough by then to move out of their parent’s house, which would lessen the probability of buying Lindt chocolate. Secondary Audience Even though Asian women are not high in number, 268,000, with an index number of 179, they are a great secondary target audience for Lindt. Those women are between 18-22 years old. They will soon have a child or have a newborn. They are employed part time in office and administrative support occupations. They are married and live on the Pacific.

Even though South East has a better index number and population, through Mintel we have determined that most of the Asian population lives by the Pacific.

Media Objectives

Based on the budget amount of $27 million for national and $3 million for spot advertising for the upcoming year, spending will be allocated toward advertising in magazines, on TV, Internet, and outdoor. We will deposit $10,350 to promotional efforts, sending three couples to see Lindt factory in Switzerland. About $300,000 will be allotted towards nontraditional media, including social media sites like Pinterest, Facebook, and Instagram. The Ostrow Model was used to determine the most effective frequency of 3.3 and an d an average reach of 70 for the whole who le year, while placing special attention on holiday months: February, April, November, and December. Reach = 70 Frequency = 3.3 Ostrow Model GRPs = 70 x 3.3 = 231 Creative

After thorough research on Lindt’s situation, specific goals, strengths, and weaknesses, a campaign was designed to meet those objectives around a perfect target audience a udience for Lindt bars. The tagline “Let Your Buds Travel” Trave l” was chosen to show Lindt’s long history h istory and background in  perfecting their gourmet chocolate. Lindt’s multiple flavors of chocolate bars were developed through the usage of highest quality ingredients from all around the world. Positioning statement Lindt is not just chocolate, Lindt is an experience. With over 150 years of perfecting chocolate, Lindt has been able to gather the finest ingredients from all around the world. With Lindt, people will be able to taste the world. Taglines “Worth its weight in gold” “Let your taste buds travel” “Refined to perfection” “Create divine moments” “Chocolate beyond compare”

“Lifetime of perfection” “Indulge in excellence” Chosen Tagline “Let your taste buds travel” Reasoning Lindt’s target audience consists of women who enjoy en joy learning about other cultures, usually through foreign travel. These women believe that learning is a lifelong journey. They treat food as a pleasurable comforter. Lindt can give them luxurious gourmet chocolate with the best ingredients from around the world, letting their taste buds travel. Media Strategy

Lindt’s new media strategy will follow a pulsing pattern. High months include those containing a related holiday. Average months include those leading up to high months. The remaining months are considered low months. The pulsing pu lsing pattern is defined as follows: ● High Months: December, February, and April ●  Average months: January, March, March, May, October, and November November ● Low months: June, July, August, and September  Of the ten Cafe Cache locations, five have been chosen to receive part of the $3 million spot advertising budget. These locations include Chicago, Minneapolis-St. Paul, Miami, Cincinnati and Charlotte. This decision is based upon estimated value percentages within each market. These five selected markets will produce the most cost efficient selection.

On a national + spot scale our budget has been evaluated based upon previous years media mix, as well as share of voice within the market. The budget is as follows: ● Natl Natl Tele Televi visi sion on - 53% 53% ○ Cable - 25% ○ Network - 25% ○ Synd Syndic icat atio ion n - 3% ● Mags - 30% ● Outdoor - 7% ● Internet - 5% ● Spot TV - 3% ● B2B - 1%

Slight changes have been made from previous year’s media mix in order to achieve greater national + spot share of voice. Lindt’s 2013 Media Mix is as follows:

Over 83 percent of the budget is reflective of past marketing strategy. The plan is to maintain consistency is these competitive media and to trade around in the 17 percent that is left over. The SOV percentage breakdown will help explain these decisions and are as follows:

Notice that Lindt’s former campaign’s have already placed Lindt within the top 3 competitors within all identified media outlets. Also, media outlets have been arranged, from left to right, in order of most percentage of budget to least, according to the 2013 media mix. The top three media are by far the most important of any. This is why the new campaign budget reflects these

same figures. The new campaign will not diminish in position in comparison to other companies within these media. However, within the lower 17 percent media have been simplified and more money has been added to prospective media. Outdoor, internet, syndication, spot TV and B-to-B will receive a larger portion of the budget in order to raise our SOV percentage for this campaign and to reach previously defined goals and objectives. Overall, the new media mix will deliver the message to the target audience in a way that is meaningful to them. This has been done don e in accordance with the succeeding plan defined within the “media execution” and “promotional and non-traditional efforts” of this book. Media Execution

We are using specific media vehicles that are targeted specifically to our audience. For television we are using: Once Upon a Time with an index number of 110, Awards Category 110, Tony Awards 132, Tour de France 160, WImbledon 142, World Cup Soccer 169, U.S. Figure Skating 170, and Emmy Awards 141. For Internet we are using SuperPages.com with an index of 349, Pandora.com 226, Imbd.com 149, LivingSocial.com 226, Amazon.com 133 LinkedIn.com 160, and Wikepedia.org 146. Lastly, for magazines we used Airline Magazine with an index number of 150, General Editorial 120, Architectural Digest 290, Bon Appetit 208, Good Housekeeping 153, People 125,Travel Category 149.

Promotional and Non-Traditional Efforts

Since the holiday seasons are Lindt’s most productive sales months, Lindt will emphasize different seasonal products throughout certain times of the year. One Valentine’s Day, Lindt will advertise and sell chocolate bouquet arrangements as well as personal messages inside chocolate  bars. When customers order, they will be able to write a personal message and Lindt will print the message and put it inside a Lindt Chocolate bar’s wrapper. On Easter, Lindt will sell its chocolate bunnies, chocolate lambs and decorated chocolate Easter eggs. On Christmas, chocolate wreaths, chocolate reindeers and hot chocolate with mug sets will be sold. Lindt will also begin a social media contest on Facebook, Instagram and Pinterest where contestants will be asked to answer the question, q uestion, “How do you celebrate with Lindt?” Contestants will be asked to share their story and the most creative way to celebrate with Lindt will win a trip to one of the Lindt Chocolate factories and a week wee k vacation for two in Zurich, Switzerland. Included in the trip is: $1,100 in airfare per person $1,800 in hotel expenses $300 in food costs

$250 for rental car There will be three winners of this campaign with a total trip expense of $10,350.

Budget

In 2013 Lindt spent $47,979,274 on advertising. Lindt has allocated $27 million towards their 2016 budget as well as an extra $3 million to help with spot marketing. Since we have a smaller  budget than the years before we have made sure to arrange our media buying to its maximum  potential.

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Natl Television - 53% ○ Cable - 25% ○ Network - 25% ○ Syndication - 3% Mags - 30% Outdoor - 7% Internet - 5% Spot TV - 3% B2B - 1%

Estimated $15,300,000 $7,500,000 $7,500,000 $900,000 $10,000,000 $2,100,000 $1,500,000 $900,000 $300,000

Actual $14,706,000 $6,887,200 $6,920,900 $897,900 $9,323,300 $2,253,300 $1,601,600 $1,627,700 $488,200

● Promotions - >1% $10,350 $10,350 We are still maintaining a large portion of our budget on national television, however by reducing spending in this medium we have allowed ourselves to grab a larger share of voice in

other sets of mediums. Due to saturated markets it was ineffective to put the full predicted spending into certain medias like national television, ho wever any leftover budget was used to  promote more effective mediums like business to business and spot TV. Our promotional campaigns have a small budget budge t of less than 1 percent because beca use its implementation costs are so minimal. With this specific budget we manage to exceed all of the reach and frequency goals set  before us without calculating for how outdoor would affect those numbers.

Appendix

Meet The Team

Maja Zelewska is a senior studying Industrial-Organizational Psychology and minoring in communications. She is from Warsaw, Poland. After graduation, she plans on continuing her education pursuing an MBA in HR, to later on start a career in the hospitality industry. Maja made sure that all aspects of the campaign were finalized and delivered professionally to the client.

Morgan is a junior at Brigham Young University-Idaho majoring in communications with an emphasis in public relations and a module in journalism. Morgan was born in California and has lived in San Diego her whole life. Morgan currently works at the BYU-Idaho Outdoor Resource Center due to her love for all outdoor activities that are water-related, but hopes to soon intern for Deseret News this winter, 2016, in Salt Lake City, Utah. Lauren Gold- is a senior studying communication with an emphasis in public relations. In her

studies at BYU-Idaho she has enjoyed learning photography, visual media, and writing. She is from Southern California and loves the sun, golden retrievers, and the beach. She hopes to do public relations for an athletic organization after she graduates.

Joshua Garlick is a senior communications major studying at Brigham Young University - Idaho. He is from Southern Nevada and aspires to continue his studies at the J. Reuben Clark School of Law in order to become an intellectual property lawyer. His long term goals include working as a lawyer within the communications field. His other areas of study, and passion, include public speaking, research development and analysis, market research and law. Chandler Miller is a junior jun ior communications major studying at Brigham Young University - Idaho. He is emphasizing in advertising and is working towards a professional career with an advertising firm in research and strategy development.

Appendix (All supportive documents including the Ostrow model)

Here is the EV % Evaluation for the Cafe Cache: Top 5 markets include: - Chicago, IL IL = 21.6% - Minn Minnea eapo poliliss-St St.. Paul Paul,, MN = 12.9 12.9% % - Miam Miamii-Ft Ft.. Laud Lauder erda dale le,, FL = 10.2 10.2% % - Cincinnati, OH OH = 8.5% - Charlotte, NC NC = 8.3%

Link to MFP flow chart and goals https://docs.google.com/spreadsheets/d/1qdmwRVPI9bmYcKZch7cRtLPsELeBnABWB8p r094kIi0/edit?usp=sharing

1 color copy 1 black and white copy