Subject: Marketing Management

2.1 Market situation and analysis of the brand

2.1.1 Economic

Twix are operating in a growing economy. Confectionary sales are expected to increase by 16% this highlights the opportunities for growth in the future (MarketLine, 2015). These products are seen as inelastic goods to an extent. In Irish term, consumer spending has increased .08% since 2013 (Trading Economics, 2016 (a.)). The increased consumer spending is due to increased consumer confidence, according to Nielson, consumer confidence is at 97. This is good news in terms of inelastic products. Decreasing unemployment rates have also contributed to the increase in consumer spending with unemployment rates dropping consecutively by .01% each month since April 2015 (Trading Economics , 2016 (b.))

Emerging economies are dominated by independent retailers and don’t favour private labels surprisingly (KPMG, 2014). Below we can see the spending tendency of those in Ireland and the UK. Over all the segments, half came in at €2.13 (Bord Bia , 2014).

Driven by low inflation, record breaking low interest rates have been seen and there is speculation that they may continue through until 2020. Currently the figure stands at 0.05% in Europe (The Independent , 2015). In terms of the economic sentiment indicator, Europe has seen its second consecutive decline in 2016. There was a decrease in both the euro area (by 1.3 points to 103.8) and the EU (by 1.5 points to 105.2) (Europa, 2016 (a.)).

2.1.2 Social

The world's population is increasing and aging. Decreasing fertility rates in emerging markets along with lengthening life expectancy in developed regions has reshaped the age structure in most regions of the world (NIH.com, 2016).

Along with the aging population there is a growing trend towards the smaller family unit. There is a forecasted decline in the average number of children per family to 1 per household by 2020, in contrast to this there was 1.9 per household in 1980. With the exception of the Middle East and Africa, by 2020 all regions globally will have an average number of children lower than 2 per house. Overall, the change in the structure of families will have an intense impact on household spending patterns in addition to housing types. The family model of the future will become a significant part of the consumer market segment, causing a knock on effect on marketing in terms of product range, size and type. There will also be room for discretionary spending as the number of children per family decline (Euromonitor International, 2013).

The number of schoolchildren speaking English as a second language has soared in recent years. Although learning English is compulsory in some EU countries a clear majority of pupils chose to learn English. Across the EU there is an average of 85% of pupils studying English as a second language (Europa, 2016 (b.)).

It is predicted that by 2050 the proportion of people receiving no education at all will converge to zero. By 2050, only five countries are predicted to have a rate of no education above 20%: these are Burkina Faso, Ethiopia, Guinea, Mali and Niger (Our World Data , 2015)

The global chocolate consumption levels are indicated below.

According to the United Nations department of economic and social affairs, the world population reached 7.3 billion as of mid- 2015. This means that there has been an increase of approximately one billion people over the last twelve years. There remains a near equal divide between the males and females worldwide. 12% of the global population is aged over 60 while 26% are younger than 15. Projected growth is supposed to be slower than past figures. Growth resides around 1.2% per year. Expectations for 2030 are a population reaching 8.5 billion (ESA.org, 2016).

2.1.3 Technology

A major development is the increasing availability of 3D Printing. Possibly one of the biggest buzzwords in the manufacturing technology sector in the last few years. There is little doubt that 3D Printing will change the face of manufacturing removing lengthy times from innovation to production to market (Cerasis.com, 2015).

2.3 Industry environment

The following are the key trends within the confectionary industry:

1. 
   Demand rises driven by emerging markets e.g. Nigeria, Saudi Arabia
   
2. 
   About 70% of the world's confectionary growth is gained from eight markets: Brazil, China, Colombia, India, Russia, South Africa, Turkey and Vietnam
   
3. 
   Consumer tastes changing. The most dramatic shift has been to dark chocolate. This shift has been driven by the perceived health benefits. There has been a 93% increase in the growth of dark chocolate product launches and as a result dark chocolate now accounts for 20% of the American market. China is the highest dark chocolate market with 34% share in 2013
   
4. 
   The rise of premiumisation, convenience, flavour variety and also added value
   
5. 
   Craft, innovation and branding are pushing sales of smaller players and thus driving larger competitors to become more creative and personable
   
6. 
   The onset risk of cocoa demand exceeding supply. Mars currently fears this could happen as soon as 2020 if the industry does not react
   
7. 
   Sustainability is pivotal. Those in the confectionary industry must go further than single, isolated initiatives, moving towards a strategic approach will improve yields and build consumer trust further
   
8. 
   Obesity is becoming the detriment to both society and the industry itself. Companies need to consider healthier products in order to create a shield against this factor
   
9. 
   Digital technology could revolutionise supply chain and timing. 3D printing can significantly decrease the time to market and thus innovation and competition is set to intensify (KPMG, 2014)
   

2.3.1 New Entrants

Regarding new market entrants, Cadbury Ireland have recently announced and gave confirmation that the original Time out bar has been officially removed from the Irish market. However, this is in order to make way for the new “Time Out Wafer Bar” (The Journal.ie, 2016). The new format of the Time Out Wafer now means that there is only one bar instead of the original two this means that they have shifted into a different sub category and aren’t directly competing with Twix. Although the new Time Out might not be considered a direct competitor, it is still a competitor none the less and Twix risk losing sales once the new bar is released.

2.3.2 Substitutes

On the topic of substitutes, there are dozens of Twix replicas on the market in terms of own brand products. Lidl and Aldi are renowned for their takes on branded products and when it comes to Twix it’s no different. Aldi offer a cheaper Twix alternative, which goes by the name “Jive” costing 85 cent (Stretching Costs.com , 2015 ). Lidl have basically the same replica Twix product called ‘Caramel & Biscuit’ costing 25 cent signally.

2.3.3 Competitive environment

The key players in the confectionary industry include: Nestlé SA, Kraft Foods Inc., The Hershey Company, Lotte Group, Ferrero Group, Barry Callebaut AG, Perfetti Van Melle SpA, Ezaki Glico Co., Ltd., Meiji Seika Kaisha, Ltd., Morinaga & Co. Ltd., Lamy Lutti S.A.S., Leaf International B.V., Want Want China Holdings Limited, and Vidal Golosinas SA (Business Wire, 2013). Although all of these are significant players in the confectionary industry the following direct competitors were established. The competitors were chosen due their similar format to the Twix bar.

2.3.3.1 Direct Competitors

2.3.3.1.1 Kinder Bueno

Product: Kinder Bueno, part of the Kinder Chocolate brand line, is a hazelnut cream filled wafer with a chocolate covering (Kinder Bueno, 2016).

Place: Kinder Bueno can be bought in supermarkets, convenience stores and vending machines

Price: The average Price for a Kinder Bueno is €0.90 (Tesco.com, 2016).

Advertising Promotion: Recently Kinder concentrated on a new ‘enjoy the great taste for free’ promotion, with a fashion focus. This was through an on pack offer giving consumers the chance to win one of three trips to a fashion capital New York, Paris or Milan, with €500 spending money. It was seen to be a perfect offering for Bueno’s core female audience. Kinder also focused on TV support to heighten consumer awareness (Talking Retail , 2013).

Sales Promotion: Kinder Beuno bars are sold signally in packs of 3 and in packs of 5 (Kinder Bueno, 2016)

2.3.3.1.2 Kit Kat

Product: Kit Kat is a chocolate-covered wafer biscuit bar confection created by Rowntree's of York, England, and is now produced globally by Nestlé,

Place: Kit Kat can be bought in supermarkets, convenience stores and vending machines.

Price The average price for a Kit Kat bar is €0.77 (Tesco.com, 2016)

Sales Promotion: The Kit Kat bar comes in many varieties and pack sizes

Advertising Promotion: Nestlé and Google launch KitKat 'YouTube my break' campaign Using Google’s voice search function, consumers worldwide can say, "OK Google, YouTube my break" to any Android mobile, or any mobile device with the Google app installed. After watching a short KitKat video on YouTube, they then see a playlist of the top trending videos on the platform and can share this content via social media (Nestle.com, 2015).

2.3.3.2 USP

A 3 layer combination of chocolate, caramel and biscuit provides a unique and very specific type of chocolate bar, this compiled with the quality of Mars chocolate provides Twix with their USP. No other branded two fingered ‘biscuit’ bar currently exists on the market. A competitor table was devised using key elements that customers found important when choosing a chocolate bar (Ward & O'Loughlin , 2016).

	Taste	Light Vs Heavy	Size	Nutritional Information	Score
Twix	4	5	2bars	148 calories 12g of fat and 24g of sugar
Kinder Bueno	5	4	2bars	244 calories 16g of fat 17g of sugar
Kit Kat	3	4	4bars	232 calories 11.3g 23g of sugar
Time Out	2	3	2bars	170 calories 9.6g 14.6g of sugar
Twirl	3	4	2bars	230 calories 13.2g of fat 24g of sugar

2.3.3.3 SWOT

Strength’s	Weaknesses
Lower calorie count than competitors Great taste Strong Partnership with retailers Strong brand recognition Financially stable Strong manufacturing competence Diversified geographic presence Focus on developing and offering nutritious products Sustainability initiatives	Weak customer engagement Outdated strategy Poor marketing efforts Product isn’t salient in customers mind
Opportunities	Threats
80% of consumers said they loved the taste of Twix Huge potential around customer engagement Twix is easily recognised and known Great span of scope budget wise Americas 12^th favourite chocolate bar Customisable chocolate confectionery for special occasions Expanding the Fair Trade range Expansion of emerging markets Ethical, Healthy, Organic and Natural products Novel Flavour combinations	Health movements Obesity Issues Tough competition particularly against Time Out Kinder Bueno Twirl Kit Kat Market is saturated with competition Threat of Healthier substitutes Private Label Chocolate Rising prices of raw materials Higher End Brands