All posts by chocomountain

How will I ever find the item I’m looking for?

too many choicesStrategic tactics are employed throughout retail to capture the attention of the potential consumer, stimulate product, generate buyers interest for future purchase, remind shoppers of forgotten necessities, and create opportunities for point of sale impulse buys. In a highly saturated product markets, like chocolate, creating unique distinction between brands is essential to attract sales. We will examine some of the general and brand specific strategies in use by manufactures, product vendors and chain retailers to promote sales.

Miriiam-Webster defines marketing as the process or technique of promoting, selling, and distributing a product or service. For retailers, everything inside and outside the store is marketing. Location, position of entryways, aisle layout, traffic flow of consumers, fixtures, lighting, temperature, signage, flagging, product placement, proximity to other goods – all contribute to the amount of time a shopper is in contact with their inventory, which products and in which order the consumer is exposed to their goods, and the likelihood that the customer will leave with more than they came for. The effectiveness of these methods is known as the conversion rate – number of people that make purchases as a percentage of people that enter the store.

Manufacturers rely on similar strategies of product placement, packaging, price point, product delineation, colors, and graphics to attract consumers and distinguish their product from competitors.

layout

(fig.1) Typical planogram for merchandising layouts for supermarkets

Shelves are arranged in four foot increments, (eight feet of beans, twenty four feet of breakfast cereal) no more than six feet tall, typically with endcaps to display additional merchandise in the “racetrack” around all the aisles. Goods will be stocked in horizontal, vertical or pyramidal arrangements, single or in bulk on a wide variety of display types to create focal points for attention and maximized exposure.  Products can be flat stacked, “book-shelved”, front face or “bill-boarded” depending on a variety of factors including: eye level appeal, price point, profitability, age of the targeted consumer, vendor’s contract, volume of product, age of stock, etc.

Billboarding and front facing process Solid and continuous wall (https://www.youtube.com/watch?v=mN5sFlbPe_A)

Obvious similarities exist between the strategies used in merchandising chocolate and other retail products. Examine the two images below:

clothing(fig. 2) Examples of horizontal, vertical, flat stacking and bill-boarding.unnamed (16)

(fig. 3) Examples of horizontal, vertical, flat stacking and bill-boarding

In the following images (fig 4 and 5), “breath freshener” products are vertically arranged together as are sours, gummies, hard suckers, and salty snacks. This display was consistent in the all retail stores examined during this study. All similar items had a specific designated locations in the store with a group of similar items.

(fig. 4 and 5)

A typical convention used for most large retail is, that most commonly purchased and highest profit items are located in the center of the racks and at the mid point of the aisle. Items that queue shoppers toward those items are placed next to the side of the racks creating a “leading effect” – guiding them towards the profit center. Leading is the strategic placement of goods that steers the consumer toward what the retailer hopes is their next purchase. In the figure 6, brightly colored candy is placed next to baking goods.

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Notice the baking goods are in plain wrappers but the candy is glossy. Also note, the Sour Patch gummy candy, with its brilliant rainbow of color, is exactly one shopping cart’s length away from the baking flour. Additionally note that the candy is at children’s eye level. Research on the psychology of supermarket traffic patterns indicate that shoppers will likely shop on the right side of the aisles and often push the cart with their left hand while placing items in their cart with their right hand.

Envision this: you’re shopping for flour with your child in the cart. With the cart stopped in one cart length from the flour. Your child then sits directly in front and at eye level with the Sour Patch gummies. You can imagine the rest.

Some things to note here. First, there is direct marketing toward the child. Second, even if there is no sale of the Sour Patch at that moment, the child has still been exposed to the product setting the stage for a future consumer. Lastly, your attention and eye have now been drawn down the aisle.

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(fig7)

One push of the cart further down the aisle and the child is directly in front of the M&Ms and Reeses – the number one and two top selling candy in the US respectfully. Coincidence? In retail “eye level is buy level”.

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Fig.8

Figure 8 is an example of further leading the consumer toward the lessor selling but more luxury brands. It’s worth noting that these less profitable brands, with less marketing power, cannot secure the same prominent position on the shelves as the larger brands. Lindt, considered a luxury brand by some consumers, is next in line on the shelves to Mars and Hershey products.

In the US, 3 Billion pounds of chocolate are consumed annually – roughly 12 pounds per person. According to a 2014 BloobergMarket report, out of the “Big Five” chocolate companies – Ferrero, Cadbury, Hershey, Nestle and Mars – Mars and Hershey dominate the $18B market with nearly 70% of sales while Nestle and outsider Lindt combined can only claim 10%. Note in fig. 9 below, that the Lindt products are sandwiched between bulk packs of M&Ms. At half the price M&Ms are targeting Lindt bulk truffles directly.

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Fig.9

While competition for the market is aggressive, consumers don’t always select their products based on price or location within the stores. LOHAS stands for the Lifestyle Of Health and Sustainability, a $300 Billion dollar market comprised of every type of good from cars to travel destinations to dog food. Glenn Rudberg, a partner and Director of Brand Strategy at ETHOS stated in a in a January 2017 interview about LOHAS consumers “They look for honesty, authenticity, and alignment of principles and values. They want real”. LOHAS consumers are willing to spend up to a 20% primium for an item that they perceive is in line with their political, personal or cultural views. Organic, Green, Sustainable, Artisan, Local, All Natural, Free Trade, Non-GMO, BPA free are all terms common to the LOHAs market. Both obvious and subtle differences in packaging suggest clear distinctions between products. Fig. 10 below shows a distinct difference in product placement, shelf layout and packaging as the consumer travels from the major brands toward the specialty, LOHAS, brands.

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Fig10.

Direct story telling has enormous impacts on consumers especially effective with the LOHAS client. The top three means of intriguing and engaging consumers listed in a 2013 Forbes article 5 Secrets to Use Storytelling for Branding Marketing Success are 1. Telling the truth, 2. Giving the product a personality, and 3. Getting the consumer to support the underdog or do-gooder. Each of the brands in fig 11 have their own story to tell. The packaging is simpler often flat not glossy, earth tones are favored over bold colors, typically stocked vertically in single packages not bulk. Directly at eye level is Lily’s. A quick glance at Lily’s website (http://lilyssweets.com/) shows every strategy listed by Forbes. Lilly is a brain cancer survivor who selflessly raises money for kids with cancer. All of her products are NonGMO and Fair Trade. How could anyone not support Lily?

A closer look reveals that every statement on Lily’s website uses a LOHAS term. Endangered Species Chocolate, Chuao, Love and others are grouped together and all employ similar practices.

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References Cited:

Billboarding and front facing process Solid and continuous wall (https://www.youtube.com/watch?v=mN5sFlbPe_A)

Merchandising Basics and Display Opportunities

https://www.youtube.com/watch?v=LZTkS2RVkr0

emotions of target consumers 

https://www.youtube.com/watch?v=mN5sFlbPe_A

eye level is buy level… clear intent to purchase 

https://www.youtube.com/watch?v=ThNeIT7aceI

80% of our produce that gets touched

https://www.youtube.com/watch?v=mN5sFlbPe_A

Meriiam-Webster

Merchandizing

https://www.merriam-webster.com/dictionary/merchandising

Marketing

https://www.merriam-webster.com/dictionary/marketing

The Era of Ethical Consumerism is Here: How to Market to LOHAS Consumers | Ethos

http://blog.ethos-marketing.com/blog/how-to-market-to-lohas

Glossary of marketing terms

http://retailertrainingservices.com/glossary-of-key-retail-and-retail-marketing-terms/

Big Five

https://www.forbes.com/2010/06/02/china-chocolate-consumers-markets-economy-candy-companies.html

LOHAS

http://www.lohas.se/wp-content/uploads/2015/07/Understanding-the-LOHAS-Consumer-11_LOHAS_Whole_Foods_Version.pdf

Forbes

https://www.forbes.com/sites/work-in-progress/2013/02/05/5-secrets-to-using-storytelling-for-brand-marketing-success/#7a7dd9257d81

Bloomberg

https://www.bloomberg.com/news/articles/2014-07-17/nestle-s-u-s-chocolate-ambitions-melted-by-lindt-deal

MIsc

https://brpconsulting.com/

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Slaves and Sugar

There is a direct correlation between eighteenth century British sugar consumption and the unprecedented increase in human slavery during that time. Between 1550-1850, new world economies, and as a byproduct, the slave trade grew at an exponential rate, peaking between the years 1751-1800. Overall, an estimated 10-15 million slaves were displaced from the west coast of Africa to Northern, Central, and South America, and especially to the Caribbean – Barbados, Antigua, Cuba, Jamaica, Martinique and Haiti – to supply a constant stream of inexpensive labor to satisfy the demand for new consumable and profitable goods – tobacco, coffee, cotton and sugar.

map

In 1700, annual sugar consumption in Britain was a mere 5lbs per person. By 1800, that number had increased dramatically to 20 pounds per person – a 400% increase. According to Sidney W. Mintz, by 1800, sugar had become a staple in daily life. Disparity of wealth, bland and nutritionally deplete diets, difficulty of labor, lack of education, resources and opportunity drove much of the common people to seek any accessible drug as a respite from the difficulties of life. “…the ever-rising consumption of sugar was an artifact of intra-class struggles for profit – struggles that eventuated in a world-market solution for drug foods…” Mintz (185-186)

graph

From the 1500s through the 1700s, sugar was a rarity to the common British citizen, typically reserved only for the wealthiest of high society. However, by 1750 that began to change drastically. “During the period 1750-1780 every British person, no matter how isolated or how poor, and without regard to age or sex, learned about sugar.” (Mintz, 146-148) Sugar soon became an integral part of daily life. As a spiced glaze for meat; a decorative component in opulent deserts, sweetener for coffee and tea, porridge, chocolate, and bread; as a preservative for fruit in the form of marmalades and jams.  Consequently and proportionately, as the demand for sugar increased, so did the call for the inexpensive labor to produce it.

To satisfy this ever increasing demand, it’s estimated that an extraordinary 50,000 slaves were required to produce 20,000 tons of sugar per year. To put this into perspective, in 1800, the population of Britain was an estimated 10.5 million people[i]. To satisfy the population’s demand – 210 million pounds or 105 thousand tons – of sugar had to be produced per year. This brought the necessary human labor force to 262,500 slaves per year – a staggering 13 million humans.

slave group

Economics determined the continent of origin for the vast majority of these slaves. African people fell prey to the horrors of unfortunate geography. “Here, then, is the origin of negro slavery. The reason was economic, not racial; it had to do not with the color of the laborer, but the cheapness of the labor. [The planter] would have gone to the moon, if necessary, for labor. Africa was nearer than the moon, nearer too than the more populous countries of India and China.” [ii]

africa map

Colonizing nations used many methods to justify slavery as a means to an end. Chattel slavery, the practice commoditizing people, sold only for the value of the potential labor they could offer their owner. The Spanish Crown offered a grant, Encomienda, to colonists for force labor upon the indigenous people of Central and South America. This led to the brutal and inhuman treatment of these slaves. During this period the average life expectancy of a slave was 7-8 years. Slaves worked 18 hour shifts often with little food or rest.

whips

 

Today, each American consumes roughly 150 pounds of sugar per year and climbing. Sugar is an ingredient in most of the foods we consume – in startling quantities. There is a perception – we have fooled ourselves – that slavery, is not as prominent today as it was during the height of the slave trade of the 1700s. However, the reality is that slavery still exists throughout the world to feed all our additions of which sugar is just one.

fat american

 

Work Cited

Mintz, Sidney W. Sweetness and Power: The Place of Sugar in Modern History. New York: Penguin, 1985. Print.

Coe, Sophie D. and Michael D. Coe. The True History of Chocolate. Third Edition. Thames & Hudson Ltd: London, 2013. Print.

Martin, Carla D. “Lecture 3: Popular sweet tooths and scandal.” Harvard University,   Cambridge. MA. 22 Feb, 2017. Lecture.

Martin, Carla D. “Lecture 6: Slavery, abolition, and forced labor.” Harvard University, Cambridge. 8 Mar. 2017. Lecture.

[i] https://en.wikipedia.org/wiki/Demography_of_the_United_Kingdom

http://www.smithsonianmag.com/history/antiguas-disputed-slave-conspiracy-of-1736-117569/

http://www.shmoop.com/spanish-colonization/race.html

[ii] Eric Williams, historian & former Prime minister of Trinidad & Tobago