In business knowledge is power. When considering expanding your product line there is a lot of unknowns. It can be like trying to find your way in the dark without a torch. Who will buy it? How many potential customers are there? What product features do customers want? How should the product be positioned to appeal to these potential customers? The questions are endless. Knowing, or at least having an insight to the answers will shed light on your journey from initial concept to the marketplace and increase the products chance of success. Market research is the torch.

The following is a short case study about Donovans Chocolates and how market research helped them ‘hit the mark’ with their new chocolate bar.

Donovans Chocolates (DC) is a relatively small chocolate manufacturer run by two brothers based in Hamilton, New Zealand (NZ). Until recently DC had only produced traditional chocolate and traditional chocolate covered confectionary. The brothers had been working on developing a new recipe. The new chocolate was made with only the bare ingredients necessary and didn’t feature any of the additives and preservatives found in all other mainstream chocolate. Their recipe gave a ‘true’ chocolate taste which was not altered by additives. The Donovan brothers knew that they were on to a great product but they were unsure of what the best strategy would be to take it to market.

DC sought the services of a marketing consulting firm to conduct research and formulate a marketing strategy for their new bar. The first steps involved a significant amount of competitive analysis around what confectionary bars are currently available in the marketplace, both nationally and internationally, and how they were positioned. This included pricing, bar sizes, branding, packaging and product range. Comparing this research against industry sales data allowed the consultants to analyse which manufacturers were doing well and why they were doing well.

It was unanimous that the new product was a level above DC’s existing range and able to compete with other mainstream confectionery items. Therefore it was recommended that DC introduce a new ‘luxury’ brand. The consultants designed a survey to test possible brand names and possible logo designs with a database of key influences made up of brand specialists, FMCG brand managers and industry associates. It emerged from the survey that the preferred brand name was ‘Donovan Brothers’. The research also aided in design aspects of the Donovan Brothers brand.

In the competitive analysis it was apparent that the market was segmented between mainstream chocolate bars – Cadbury, Whittaker’s, Lindt, etc; and organic chocolate bars – Green & Blacks, Dagoba, Scarborough Fair, etc. The new recipe was organic but after much analysis the consultants recommended that the bar was not positioned as organic. The organic customer base, although growing, was still very small and competitors consisted of a couple of large and a lot of small manufacturers. The mainstream chocolate bar customer base however was much larger. Going after the mainstream customers would mean that Donovan Brothers would only need to secure a small share of the market to be successful. The consultants recommended calling the bar ‘Donovan Brothers Pure Chocolate’. The word ‘pure’ is very mainstream yet still appealed to people who are concerned about the content of their food. ‘Pure’ would give Donovan Brothers a point of difference in the chocolate bar marketplace as it would highlight that it has no additives or preservatives. Pure had been used successfully by other New Zealand products such as beer, water and most notably in Tourism New Zealand’s international marketing campaign. This tourism link was important as it was planned that the chocolate would be exported and also sold in duty free stores.

Donovan Brother Pure Chocolate is now available in most supermarkets throughout New Zealand and has been selling well. Quality market research ensured that Donovan Brothers were well equipped for a successful entry and poised to deliver strong growth.

Source by Kieran Ross