The development of chocolate as a commercial good and its mass production through factories spurred the strategy behind its sale through the use of advertising and marketing campaigns. However with great changes in the industry over the last century, there are both new opportunities and ordeals in selling chocolate. Greater data and studies have improved the scientific and creative approach to marketing all consumer product goods, and considerations related to health, pricing, gender norms, and the accuracy of claims present new and growing challenges to the marketing of chocolate.
Consumer research and the art of marketing was largely instigated by the Rowntree company at the beginning of the 1930s. Facing competition from several other chocolate producers, Rowntree struggled to keep up with sales of Cadbury’s Dairy Milk. Company leadership recognized that “consumers could exercise a large degree of preference over which non-essentials to buy or could decide against purchasing non-essentials at all… its demand had to an important extent to be created through advertising” (Fitzgerald). As sales continued to falter, Rowntree turned from individual campaigns to consumer surveys to guide their marketing policies. By incorporating sales research into their marketing mix, Rowntree was able to boost sales dramatically, targeting campaigns to consumers. Still, chocolate manufacturers were dependent upon “shopkeepers to stock and adequately display their goods at the point of sale. A large number of outlets and visibility stimulated the impulse buying of confectionary…” (Fitzgerald). Creative display aids, posters, and packaging helped increase brand visibility and draw attention to the product in stores.
After its start, marketing was deemed “essential” to the success of a firm, trading serendipity for strategy. The chocolate industry harnessed the power of economic and psychological study to drive its success going forward, incorporating new research into tried-and-true methods related to product branding, packaging, and placement in stores. Marketing and targeting are apparent even in chain pharmacy and convenience stores such as CVS, evidencing the broad and growing availability of “luxury” chocolate products.
While exact product placement varies from store-to-store even within grocery and pharmacy chains, the general formula remains the same to maintain the consistency and quality of store atmosphere. Aisle organization generally remains fixed to improve the ease of the shopping experience for regular customers. Thus, extrapolating the findings for a chain store can give a convincing picture of the broader regional or national market.
One of several CVS Pharmacies in the Cambridge, Massachusetts area, the Harvard Square location on Massachusetts Avenue provides an interesting and compelling case study for the marketing and sale of chocolate nationwide. Conveniently located on the first floor of the multi-story establishment, the confectionary aisle contains both season and non-seasonal bagged candies, chocolates, magazines, and travel items. Rotating end-cap displays showcase premium chocolate selections, and chocolate bars are also located at checkout kiosks and occasionally on the second-floor in the giftwrap and personal hygiene aisles.
Evidence suggests that these products are not only intentionally placed around the store, but in specific areas of shelf space, pointing to the power of chocolate interests in dictating shopkeeper arrangements of store layouts. This setup is underpinned by decades of research and study.
Placing products in stores which have broad exposure and are conveniently located is key to the success of any consumer product company. According to research from KPMG, an audit, tax, and advisory firm, “Convenience is a major driver for chocolate lovers, who want to grab a bar from a local store or throw a multi-pack into the trolley during a weekly shop.” Compared with other products, chocolate is an affordable luxury that is most often an impulse purchase, picked up when buying other necessities at grocery stores and pharmacies more often than at specialty chocolate stores. Survey research from Canadian Consumer found that “shoppers are most likely to trade-up on chocolate when it comes to buying indulgent groceries,” with nearly 2 in five shoppers saying they buy premium chocolate regularly or frequently, providing opportunity to reach and up-sell chocolate to those shoppers in stores they already visit.
Within the store, micro-level decisions are critical in shaping and swaying consumer purchases. Industry research from Convenience Store Decisions recommends that store owners “Leverage the impulse nature of candy by utilizing strategically-placed points of purchase that follow consumer traffic patterns.” More specifically, multiple points of impression, valuable end-cap space, shelving formulas and point-of-purchase displays are all factored into the value of the marketing mix. The Institute of Sales and Marketing in Dubai points out that “Shoppers don’t naturally go up and down every aisle in a supermarket. They dip in and out of the ones they need to go down, which is why the end of each aisle is so valuable.”
Placement on shelves has also been widely studied. According to the National Institute of Health, the middle shelf is the highest selling area, though the Economic Times evinces that “lower shelves hold definite merchandising opportunities for children. Chocolates showed an increase in the range of 14 to 39 per cent in their sales as they were clearly visible to the ‘junior’ target group.” Consumer experience is further influence by the feel, language, and design of brand display aids that complement store arrangements, with different display units and surroundings which hope to make the customer “feel they are making a special purchase” (ISM).
At the CVS in Harvard Square, the laminated wood end-cap is currently used to display the higher price-point “Premium” chocolate bars from Lindt, Godiva, Ghirardelli, Ritter Sport, and Ferrer Rocher from four to five dollars. Products such as Brookside’s dark chocolate and fruit are also placed on multiple shelves in the same aisle at different heights to improve visibility. Additional register and seasonal chocolate displays saturate the shopper experience, ensuring that buyers come into contact with chocolate at least once in their visit to the store.
Interestingly, the arrangement of different products together can further influence buying behavior. A study by Ram Bezawada et al. on “Cross-Category Effects of Aisle and Display Placements” found that there is an “affinity” between different types of products which are more likely to be purchased together, influenced by display proximity, special promotion, or separate psychological factors. In sum, “retailers can use the results of affinity analyses to plan more effective in-store merchandising and promotion strategies to increase their customers’ cross-buying of products, leading to greater purchases at their stores.” Marketing items, in tandem, then can improve store’s bottom lines.
The connection between women and chocolate advertising is well documented, and the cross-marketing of certain items with chocolate in stores such as CVS further underscore this perceived connection by marketers. The location in CVS places the chocolate bars and sampler boxes closest to the store’s magazine and Harlequin romance novel display within the aisle, and again together at the point-of-purchase at the register. Assuming that the proximity of these items is strategic, it is apparent that magazine and chocolate bar purchases are often made together. Studies of chocolate scents confirm that chocolate is “congruent” with books in the food, drink and romance genres (Time Magazine). Most strikingly, special promotions and in-store placement also group chocolate with feminine hygiene products, playing into the widely-perpetuated belief that chocolate helps to alleviate- or at minimum- brighten cycles.
This makes me laugh. Chocolate in the aisle with panty liners. Wonder who ordered that bit of marketing strategy? pic.twitter.com/O9ZeLsdBVP
— Ann Reed (@FightingJayhawk) May 2, 2014
The tie between women and product placement comes full circle when considering the target audience of chocolate promotions in grocery stores and pharmacies. Despite the gains made by women over the last several decades, the domestic sphere remains dominated by women. According to a She-conomy report, women account for 85% of all consumer purchases, still making 93% of all food purchases. The Harvard Business Review suggests that for marketers, “food represents one of the largest opportunities. Women are responsible for the lion’s share of grocery shopping and meal preparation. Food is also one of consumers’ most important budget items, one that can be adjusted but never eliminated.” Thus, with women’s proclivity and supposed addiction to chocolate, marketers place chocolate in places that women in particular come into contact with.
Responsibility for shopping squeezed by increasing involvement in the labor market and less time makes women perhaps even more likely to indulge in the convenience of chocolate when they encounter it. As indexed by C. Nuttall in Industrial Chocolate Manufacture and Use, women are more likely than average to eat premium chocolate brands (index: 124), and more likely to eat chocolate in general (index: 106); homemakers index at 113 for heavy consumption of chocolate.Video courtesy of WSJ http://on.wsj.com/MhtDFR
The recurring mention and admitted preference for “premium” chocolate evidences the fact that “Chocolate is becoming increasingly premiumized…as consumers develop a taste for everyday glamour” (KPMG). The marketing of premium chocolates in chain stores such as CVS stands in stark contrast, however, to the selection of premium chocolates in gourmet and specialty stores such as nearby Cardullos.
Averaging a far higher price-point around or above seven dollars a bar, the chocolate at Cardullos is marked by labels boasting fair-trade, organic, and award-winning distinctions, a much different and greater variety of brands and flavors compared with its mass-market neighbor. Both the store surroundings and the higher price strengthen feelings of chocolate sold here as an experience and true luxury.
The distinction of quality in spite of similar premium claims between the chain and specialty store betray some of the marketing challenges faced by the chocolate industry. While the chocolate sales have remained buoyant in a struggling market, with premium and dark-chocolate sales growing as a proportion of the market, the concept of quality remains hazy. Without any agency or industry watchdog, the definition of “premium” remains undefined and broadly applied as discussed in Raising the Bar: The Future of Fine Chocolate. One producer admitted that he believes “There is too much marketing and hype… It is marketing that is driving many of the decisions consumers make… Marketing is sometimes more important than the flavor and quality of product because the consumer is not in a position or doesn’t take the time to distinguish quality chocolate.” Rather than informing the consumer, marketing can manipulate opinion and buying behavior in favor of “big chocolate” over small-scale operations with little or no marketing budget.
The sale of premium, dark chocolate to women in pharmacy settings as heart-healthy indulgences also demonstrates the strength of marketing in shaping public opinion regarding a specific product, even when science behind such claims is unproven. The price disparity obvious between premium chocolate at CVS and premium chocolate at Cardullos demonstrates another challenge for the industry going forward, bringing to light the near 100 percent price difference between big and small chocolate brands and questioning whether true premium chocolate manufacturing can be sustained by the market when it does not have the mass-market audience of other brands. The development of industry standards and codes of conduct may help to alleviate some of these concerns and increase transparency both for producers and consumers.