In an industry insight blog post, Francisco Redruello, senior food analyst for Euromonitor International, said: “The chocolate industry is in turmoil.” He said that margins were being threatened by rising commodity prices (cocoa butter is up 70% since the beginning of the year), Western European and North American obesity levels prevent aggressive volume expansion and still shaky economic growth in EU countries means consumer are watching their wallets.
Redruello said: “Against this backdrop, the need to implement cost-efficient strategies to build brand equity is stronger than ever.” He pinpointed Milka’s strategy as something other manufacturers should learn from and follow suit.
The ‘last square’ promotion
Redruello said that Milka’s chocolate tablet range Au Lait du Pays Alpin, available in France, is a, “key example of effective selective marketing”.
After a revamp of the 100g format in September this year, the packaging now carries the message: “Où est passé le dernier carré?” (Where has the last square gone?). The chocolate tablet block is sold missing the final piece of chocolate.
Consumers are then invited to log on to the website to enter a code found on the packaging along with their name and address and the name and address of a friend. The ‘missing square’ is sent free of charge to the person of their choice within a period of eight weeks.
Selective means cost-effective
He said that the thing that sets Mondelēz International’s strategy apart from traditional free sampling in supermarkets is its selective targeting.
“Consumers usually have friends of similar backgrounds and preferences. When they choose who should receive the free chocolate sample, it is not a blind choice but one based on the intimate knowledge of the recipient’s preferences,” he explained. This makes the marketing strategy a much more cost-effective way of distributing free samples, he said.
Broad opportunity for niche categories
Redruello said that the same technique needs to be implemented across a broader spectrum of indulgence products. “Targeted samples could be especially effective in niche categories where information on potential consumers is sparse and hard to come by,” he explained.
He suggested stevia-based sugar confectionery as one category which would “clearly benefit" from targeted samples, as well as Fairtrade chocolate products and gender-specific snacks.
“The extension of targeted samples to the entire indulgence industry is crucial for its mid-term expansion,” Redruello said. “Ask manufacturers, and they will say that consumer profiling for established brands is important. In niche categories, it may become the difference between failure and long-term commercial success.”
Top brands in France
According to Euromonitor International data, Milka is among the top chocolate brands in France - falling behind another Mondelēz name, Côte d'Or. Looking at the market shares of these leading confectioners in France during the time period 2008 to 2013, Milka has made the most head way in increasing its percentage.
