Case Study Darling Chocolate

22. 11. 12 Case Study Darling Chocolate (Group 7) 1. The population is truly huge in St. Petersburg and therefore there is richly gross revenue potential. The population has experienced improvements in animateness conditions and material well-being however the standard of living was not that high and incomes argon still precise low. The annual average growth of income was 23% and average annual inflation rate was only 12%. The average spending on food is about 56% of family budget. Only 2% of monthly expenditures for food are spent on chocolate and arsedy.Due to several reasons the attitude of Russian consumers is much or slight negative towards imported (foreign) products. They perceive that home(prenominal) products are at least as good as foreign products. So, in general they prefer domestic products. Hence, it is not in truth easy to create spot awareness, because Russian consumers are very(prenominal) skeptical and don not trust advertising blindly. Chocolate is se ns consumption product. Hence, all people are potential buyers. Russian consumers were desiring and increasingly demanding more variety in all kinds.The commercialise can be divided into two categories, box chocolates which are seen as more luxury products and are often used for gifts and chocolate debar which are used for personal (more spontaneous) consumption. The market experiences seasonal ups and downs for example Christmas and New Year holiday season and Womens Day are very important times for selling chocolate. The intensity of consumption is around 4 kilograms per person per year. Consumers can be divided into baleful, medium and light user. There are many companies, foreign and domestic, are competing on the market.Foreign companies had been very successful due to low prices and predatory advertising, but in recent years almost consumers prefer domestic brands. The top three Russian companies in this business are Krupskaya, Azart and Red October. One of the most impo rtant characteristics entering the market in St. Petersburg is the price because it for customers it is the main decision criteria for purchasing or not. The due south one is the specific target aggroup due to the fact that different groups prefer different tastes, ingredients and quality.Additionally, the competitors are very important to take into consideration. In ordain to achieve brand awareness and to get word meaning from the Russian customers as a foreign brand the advertising expenditures are very high. 2. It seems to be very difficult to succeed as a foreign ships company in the Russian market, because customers are quite a price sensitive and focused on domestic brands. Therefore, we recommend entering the market with chocolate bars first in order to create higher(prenominal) brand awareness due to higher sales in volume.With those products the company has lower costs for production, experiences economies of scale and can offer lower selling prices. Additionally, th e heavy users which spent the most amount of money on chocolate are targeted with this strategy. Besides, customers rely on opinions of others word of mouth advertising could be a benefit. Finally, an aggressive and huge advertising campaign is useful. After having brand awareness, the institution of higher priced (luxury) chocolate could be easier. However, a good quality is necessary. . The most appropriate customer is the knockout User, because those people are buying chocolate continuously and spontaneously. More or less, the younger and mid-aged target group should be the aim, because older people rely on their experience and are very loyal to domestic products. Advertising depends on the avail fitting budget for this project. In general we would recommend a very aggressive advertising campaign using nearly every media that is available. One reason is that there is a high level of competition.Very important in this case is advertising on Metro-trains and busses as well as at Metro and bus stations. At those points a lot of people spent much time and earn the ads repetitive. Moreover, our aimed target group is usually using these opportunities of transport and people are often commuters. This kind of change of location enlarges repetition effects and reinforces brand awareness at no additional costs. Additionally, advertising on TV and Radio has to be done as well because those are very important media in Russia to domain the target and therefore to create brand awareness.However, TV is preferred over Radio (although it is more expensive) because you can sell your message easier by pictures. Adverts in newspapers are also important because 70% of households read a daily newspaper. It is also a good medium to offer coupons and give away. But in order to reach younger people and advertise colorful (brand awareness) magazine has to be used for advertising as well. 4. The most important thing could be to convince the people that a foreign company is able to fit the needs of the customers in Russia. Therefore, it is very important to sell products with high quality at an low-priced price.In order to get a higher market in whole Russia the company has to spread to capital of the Russian Federation and other important cities. Additionally, the product portfolio has to be enlarged to reach more people. At first, the introduction of higher priced products (box chocolates) is necessary in St. Petersburg. Depending on the time this introduction could be most successful when there is Christmas Holiday or Mothers Day when people are seeking for special gifts. Probably the company can think about a production plant in Russia, employing domestic people, lowering passage costs etc. getting a more positive image.