2003 PRSSA Bateman Case Study Competition
Ferrero U.S.A., INC. (Nutella)
Background
Nearly three generations of Europeans have grown up eating Nutella,
the delicious chocolaty hazelnut spread. Nutella is a staple in
virtually every household and Europeans have made it a category-generating
product with millions of pounds consumed each year.
Most college students today were on a strict baby food diet when
Nutella first appeared on American store shelves in 1983 as an
import from Italy. Twelve years later consumer demand had become
so great, the company began producing it in America to distribute
within the country.
What is Nutella?
Pietro Ferrero, a pastry maker and founder of the Ferrero Company,
created Nutella in the 1940s in Italy by mixing cocoa with toasted
hazelnuts, cocoa butter and vegetable oils into a spread. For
roughly a penny, children could go to their local food store with
a slice of bread and ask for a "smear" of the spread.
This became so popular that Italian food stores started using
it in a service called “The Smearing.” Today, Nutella is the number
one spread in Italy, Germany and France, and worldwide it outsells
all brands of peanut butter combined.
Nutella’s taste is unique. Cocoa combines with fresh toasted
hazelnuts and skim milk to give Nutella a creamy chocolaty taste.
Europeans have enjoyed Nutella for many years. In different parts
of Europe, Nutella is eaten primarily at breakfast or as a snack
spread on fresh breads and croissants, in crepes and on fruits.
Situation Analysis
Children in Europe grow up eating Nutella for breakfast just
as American children grow up eating peanut butter (with jelly)
for lunch. When Nutella was introduced in the United States, its
European uses were not quickly adopted. American parents aren’t
open to giving children a product that looks like a chocolate
cream for breakfast. After extensive consumer research, Ferrero
determined American children were not eating the spread as much
as adults. In fact, results showed a substantial proportion of
household use was among adults. Specifically, these adult Nutella
users tended to be more affluent, better educated, more sophisticated
and experimental with food behavior. Likewise, these qualities
can be used to describe many college students. Therefore, Nutella
began exploring college students as a target market.
Although Nutella sales have shown double-digit increases for
many years, it’s apparent that there still is a lack of awareness
for the product and its uses. Generally, Americans consider Nutella
a snack or dessert spread on fruits, pretzels, toast and crackers
or used in recipes. Marketing studies consistently have found
that consumers’ purchases of Nutella dramatically increase after
trying the product. And, brand adoption takes place after three
to four purchases. Therefore, sampling and product demonstrations
(in-store and elsewhere) as well as couponing have been critical
to marketing efforts.
Not only has Nutella made great efforts to communicate product
benefits to consumers, it also has developed close relationships
with the trade (e.g. supermarkets, convenience stores). The trade
are considered a key channel because- without them- the product
would never get to consumers. Because of the trade’s importance
to Nutella, Ferrero developed two distinct means by which a retailer
can acquire the product: the specialty distributor network and
direct distribution. The specialty distributor network, first
established when Nutella was imported from Italy, warehouses the
product to eventually sell as part of a package of specialty items.
Specialty distributors maintain responsibility for stocking and
merchandising. Although this method is slightly more expensive,
it works well, particularly with smaller or independent accounts
that enjoy providing specialty products to their clients. The
direct distribution model allows retailers to receive Nutella
directly from the Nutella plant in New Jersey, instead of through
intermediaries. Although both mechanisms of working with the trade
have proven effective, Nutella is interested in exploring smaller
markets and trade outlets, particularly the ones on college campuses,
including campus-administered cafeterias, mini-marts, and other
food establishments.
Judging Criteria
A. Four Step Process (70 points total)
1. Research: Thoughtful analysis of the situation,
identification of key audiences and “fact-finding activities”
to determine relevant trends, attitudes and policies (e.g. telephone
conversations, surveys, literature review): Document use of
information to determine appropriate implementation of tactics.
(20 points)
2. Planning: Statement of objectives, alternatives
considered, strategy and development of program (key publics,
channels of communication and tools, messages proposed, assignment
of responsibilities, timetable and budget, with emphasis on
feasibility of each of these). Include organization and clarity
of written plan. (20 points)
3. Execution: The plan should detail the specific
activities conducted to implement strategies of the public relations
plan. (20 points)
4. Evaluation: The methods the team used to
formally evaluate the effectiveness of its plan against its
objectives. This will be important in determining points for
“Effectiveness,” below. (10 points)
B. Effectiveness: Understanding of the situation—application
of a viable marketing communications and public relations plan.
Did the plan meet set objectives? Did the plan’s messages reach
the target audiences? Did awareness and trial increase? (15 points)
C. Creativity: Creativity in planning and executing
results. Were the goals met?
(15 points)
Back
to Bateman Competition
Top
