Kinder Surprise potentials

There are two approaches that can be used to measure sales potential: break-down and build-up approaches. In the former one develops an economic forecast for a specific area and then estimates market potential on the basis of the forecast. Sales potential is then derived from the general forecast and the estimate of market potential (Dibb, Simkin, Pride, & Ferrell, 2012, p. 685).

The latter one, there is an estimation made of how much a potential buyer will purchase during specific time in a specific area multiplied by the number of potential buyers (Dibb, Simkin, Pride, & Ferrell, 2012, p. 685). The totals of all the geographic areas are calculated to determine the market potential. To estimate the sales potential, marketing activities are taken into account and a proportion of the total market potential. In order to estimate market and sales potential of Kinder Surprise in the Netherlands in 2015 I decided to use build-up approach as it is easier in my opinion. However, the company does not provide any statistics or other databases, such as Central Bureau of Statistics, Eurostat, Euroline, Statline, WorldBank do not have any information regarding the average number of Kinder eggs bought. I also tried many variations in Google, but I only found information for Russia. There are different consumer panels (europanel, kantarworldpanel), but they only provide their service to those who pay for it. Due to the unavailability of information I decided to estimate market and sales potential in Russia in 2014. According to (Chan, 2014), the average number of Kinder Surprise bought by one person in a year is 7.8. Multiplying it by 99 301 which is a number of people in Russia in 2014 ranging from 10 till 60 years (GKS, 2016), we get 774 547,8 which is an estimated market potential. According to (Chan, 2014), there will be a 20% decrease in sales of Kinder surprise due to sanctions against Russian Federation. This means that the sales potential will be 154 909, 56 items.

It is necessary to write a marketing plan for Kinder Surprise sales in the Netherlands because in each country there are its market trends and customer issues (Dibb, Simkin, Pride, & Ferrell, 2012, p. 678). For example, the trends might had changed since 2008 the era of economic crisis (government of the netherlands, 2016).

So first, is that right goals can be set knowing the external influences on company’s environment. Secondly, the external influences can create certain threats within a society which might affect Kinder Surprise sales, thus should be mentioned in the marketing plan. For example, a trend of people paying more attention to their health can subsequently result in people eating considerably less chocolate. Thirdly, large expenses can be avoided if a marketing plan is done successfully, because trends, environmental influences and problems are taken into account. Ferrero Netherlands might not write a marketing plan since they have a lot of departments worldwide which means that they should spend a lot of time doing time-consuming stuff. There could be sales forecasts used in order to develop further on a marketing plan for Kinder Surprise for the years 2016, 2017, 2018. I would use Customer forecasting technique in the future. According to (Dibb, Simkin, Pride, & Ferrell, 2012, p. 187), through it marketers can ask customers what types and quantities of products they intend to buy during a specific period of time. Second advantage will be increasing sales potential by people’s integration in the decision-making process itself. The advantage of this is that customers can start being involved somehow in the development of the Kinder toys, for instance giving ideas or sharing their favourite character. The disadvantages of this is that customers must be able and willing to make ac- curate estimates of future product requirements (Dibb, Simkin, Pride, & Ferrell, 2012, p. 187). The other disadvantage is that people might do it just for fun not paying attention to how accurate the answers should be.

International market advantages and risks

Kinder is an international brand which is recognised almost all over the world. There are 49 countries worldwide where the company Ferrero has its sales facilities and/or factories, manufacturing facilities. This countries include 27 countries in the European zone, 9 countries in America, 9 in Asia and 2 in the area of Oceania. The most recent establishments took place in Turkey, Mexico and China. Kinder Eggs are sold all over the world, including the United States, where they are sold in European Markets and Russian Deli stores, despite being illegal. Going against the ban, suppliers began to put them in a secured box and deliver it via shipping cargo (as a safer way to import Kinder Surprise in the United States) and put it in one vehicle. The importance of Kinder products is such that without them, Ferrero’s international market share would fall to 14% from 38%. Comparing between product orientation strategy and market orientation strategy, Ferrero follows product orientation, with some products, like Kinder Joy, Kinder Surprise and some multipackages being market oriented. This is because the company tries to meet needs of children to have a suitable and trendy toy inside. Since an establishment of a factory in Vladimir in 2009, Ferrero employs 1,500 of groups total payroll of 22,000. Sales in year 2011 in August were €6,6 billion with profit before tax of €900m.

Sales in a company can be affected by legal forces, tax  regulations, political factor due to relationship between countries. This was the case in Russian market when the west started to restrict import into Russia. On average Russian buys 8 Kinder Surprise items per year. This number was at high risk of change because of the fact that countries were imposing sanctions on Russia over the crisis in Ukraine.

The examples of government policies and their affects on international companies could be the United States and Chile. It’s been more than 30 years already since the US government keeps an embargo on Kinder Surprise eggs. The 1938 Food, Drug and Cosmetic Act bans non-nutritive objects, such as toys claiming that the surprise toy could be a choking hazard for kids and therefore are too dangerous for children. There has been a nutritional food labelling law introduced in Chile in 2013, which says that companies cannot use ‘commercial hooks’ to attract children under 14 years of age. This policy is concerned with obesity problems. Kinder Surprise eggs accused of featuring a ‘commercial hook’ as well as McDonald’s. These companies will be affected by law. 

Environmental analysis

The producing company of Kinder Surprise is Ferrero. Associated with better nutrition needs and boost of the number of children involved in physical activities, Ferrero has started to introduce sport campaigns and promote physical activity amongst young children. The company sponsors, organises tournaments and events highlighting the importance of sports in our lives. Company becomes better marketed this way.

Recently, there have been going a lot of discussions about the use of palm oil in the production of food. Many claim that it is not healthy, and if used too much it is even dangerous for us. Also only about 40% of the world’s palm oil producers are the members of the RSPO organisation, which ensures the sustainability of palm oil.

Since the topic is rising its popularity and everyone is becoming aware of it, there is a lot of attention given to it on that matter and now people start paying more attention to the ingredients. Many products are not being bought because of the use of palm oil and the companies decide to change to certified segregated sustainable palm oil.

Same way for Ferrero, starting from 2012 until 2014 the amount of certified oil sourced increased from 60% to 100%. Research has found that the companies that switched to that kind of oil had become more profitable and had gotten significant returns on investment.

According to the Central Bureau of Statistics, there is more chocolate and cacao exported than it is imported in the country. This can be related to the higher price of the product in this country and the reason of the prices in the other countries. The second external factor which can be useful is the age of the people living in the country. The reason for that is because the majority of the people that consume that product is important. In this case it is the younger generation. The increasing amount of the younger people in the country can play a role in the increased consumption of the product. According to the statistical publication, the country gets older and this can be a reason for the decreased consumption of the product.

There are many vegetarians in the Netherlands. The majority of those might not drink milk, which automatically means that they won’t be buying Kinder Surprise because due to the same reason. Religious differences will not affect the buying trend of the product in the Netherlands.