Marketing Pricing process and decisions paper

Around the 1850’s chocolate had been introduced into the world and has been a growing commodity amongst consumers globally ever since. The delicious product is one that has been a longtime popular favorite, and as the years go on, it continues to expand and change along the flow with of demand and changes in the world. In the sea of different brands and producers of chocolate, Chuao Chocolatier company is one that stands out amongst the rest, taking their inspiration and some of their recipes from a criollo cacao plantation that was once their small family farm. Chuao takes the expanding and creativity areas of chocolate to a whole new level producing treats that are unusual, unexpected, and made of a higher quality and standard. Founded in 2002 by two Venezuelan brothers, more famously Chef Michael Antonorsi, Chuao has appealed to those consumers who prefer the higher quality, uniqueness that chocolate has grown to offer.  Many of their types of chocolate require a more sophisticated palette such as their Orange-A-Go-Go and Maple Bacon chocolate bars while others appeal to the simpler flavors such as the Honeycomb Bar.  The unique flavors pay off as Chuao has seen a large expansion in business, with the company earning the National Association for the Specialty Food Trade. This award almost single handedly placed Chuao Chocolatiers on the map. Starting off as just a small cafe located in California, they now have two cafes in San Diego as well as an online website where they expedite chocolate nationally, and they even sell chocolate in local stores such Target, Whole Foods, and Publix. Due to the higher quality of Chuao's chocolate the prices tend to be marginally greater than their competitors, though their target markets are those that can afford a small luxury item.

Normally marketing towards the more mature end of the chocolate market, our group was tasked with creating a product that is marketable to both upscale flourishing family’s children, as well as their parents. The first priority of the group was to understand the Chuao business model, in order to think and act as it would. With the mission statement “A commitment to create unusual, unexpected, and delicious flavors using our secret blend of premium chocolate.” taken into consideration, our group set out to introduce a fun and creative product that has a focus target of children. The group’s primary consideration with the conceptualization stage of the project was the flavor profile of our bar. This was less difficult than expected, as the combination flavors familiar to children accomplished the two-pointed goal of design for children and design for adults. Following Design was distribution, and the ways in which the product could be shipped indirectly to the customer. Chuao’s main method of sale is electronically from their site, that factor allowed the group to focus on the retail portion of the business. Given the distribution of the target population, and the availabilty of the necessary facilities, the group determined the ten best options for storage and further distribution of the product. To conclude with our development the group had to come up with all relevant costs associated with the manufacturing and shipping of the product.

Product Scope

The primary goal for our product was to be marketable to upscale families with a focus on their children. With that in mind the group had to primary design goals of: simple and familiar flavors that children love, and combinations of such that will entice parents interest. The early “prototypes” included: Fluffernutter, Graham Cracker and peanut butter; almond marshmallow chocolate, and banana chip. Carrying these ideas into the design kitchen, the group tested several combinations of flavors, removing the weak combinations and readjusting those that were well received. The result was a candy bar that was a unique combination of fiery cinnamon, mellow marshmallow, sweet milk chocolate. This was the conclusion based on the concept that children would enjoy having a candy with familiar flavors rolled into one, and their parents would be drawn by the complex flavor profile created by the said combination. On the macro level, this product is designed to broaden the consumer base of Chuao Chocolatiers in the long run. By introducing the brand to the new market of children, and by proxy their parents, the new customers may be inclined to test the other offerings of the company. These factors considered together will increase the consumer base of Chuao Chocolatiers, and evolve the strategy to encompass further expansions.

Mission and Goals

Chuao Chocolatier’s marketing model originates from their philosophy that “unusual flavor combinations are at the heart of Chuao Chocolatier’s unique experience.”  (cite chuao website). The company’s marketing style is centred on the idea that at a glance, the potential consumer should understand exactly what to expect. This is evident with the simple color scheme that is unique to each flavor, and accompanied by a picture that visually predicts the flavor of the bar. This simple design philosophy stems from Chuao’s origins as a small company, and their need for simplistic packaging. Chuao Chocolatier is oriented in such a way that their production design provides to the needs of a targeted portion of the chocolate market while simultaneously establishing their reputation of creative design (Lamb/Hair/McDaniel, 2013, p.5). Examples of their efforts to design for the specialty chocolate market include their “Spicy Maya bar” which combined chile, cinnamon, and cayenne, mixed with high quality dark chocolate. Customers are willing to pay the higher price of the product due to Chuao’s sales tactics focusing on their reputation for quality and creativity (Lamb/Hair/McDaniel, 2013, p.5). The company’s design encompases more than just their product, as is evident by the simple combination of magenta and white. Besides giving the page a clean, romantic, and youthful look, it also acts on the human psyche. Psychologists have found that color plays a large role in consumers mind when considering a product or branding, and potentially association with other companies. Quoting Brian Honigman of the Huffington post, “Psychologists have studied how people are affected by colors for years and found a strong correlation between colors and emotional responses, further driving home the point that choosing the right color is crucial in determining how your brand is viewed” (Honigman, 2013).

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This chart illustrates the aforementioned concept visually, highlighting how red-shifted colors tend to be more exciting and lively. This is important for their marketing strategy and orientation because they are confirming in the consumer’s eyes that their company is lively and bold. Considering that the new target market, the color pallet needs to catch the eyes of children before the parent, as the children are considered the decisions makers with their parents purchasing the product. If the product reaches the families in this manner, Chuao’s dedication to quality will be evident to the customer and in turn create repeat transactions.

Chuao secures its place in the market by creating a standard benchmark from which they can expand their flavors. Their chocolates vary immensely in taste, ranging from salty flavors the of Maple Bacon Bar all the way to the sweetness of their Honeycomb Bar, full of actual honey clusters. Chuao is aware that their targets share the similar above average income, but Chuao also recognizes their different wants and needs. With the group’s new product, Cinna-Bomb, the focus is to create a familiar base and to add only a slight alteration to appeal to children as well.

During the process of strategic planning, we knew we would have to take into consideration the possibilities of every error that could disable our product from performing and producing long term profit growth. One of our biggest roadblocks was the thoughts and opinion of our Consumer Behavior and Advertising consultants. Many argued that the cinnamon bite of CInnabomb chocolate may be  too much and exceed the limitations of a child’s palette for taste; however, this does not seem to be the case..  Research shows that the number one reason a child rejects food is due how bitter it its.  Bitter foods and flavors are rejected so much by children that scientists are even trying to alter flavors of toothpaste and medications to be more tasteful by lowering the bitterness. (taste and flavor article). Cinnabomb;s ingredients are solely milk chocolate, organic marshmallows, and cinnamon oil. All three ingredients lack any aspect of bitterness and in fact appeal to sweetness quality. Research shows that humans are born with the innate ability to love sweet things because of the ability to reduce pain in the mind (taste and flavor article).  "How a food tastes is really a combination of taste and smell and a third chemical sense that detects sensations such as the coolness of mint, the burn of hot chili peppers," she explained. "All these perceptions arise and combine in the mouth to form the impression of flavor."   “””””The basic senses of taste and smell are "gatekeepers" that decide what foreign substances are taken in or rejected by the body, she said. The same senses function as the sources of extreme pleasure and pain, a particularly important point for babies and young children.””””Cinnaomb has a strong smell and bite that will act as that gatekeeper,

After taking a deeper look into our target market, we saw that consumer behavior of people in a specific target market is pretty uniform and especially in a market where money is fluent leaving time for more hobbies and interests, many individual's decisions, purchases, and actions can influence each other greatly.(JSTOR journal pg 198 )., Keeping that in mind, the idea of marketing to children in these saffulent housebolds seemed like a good idea because if one kid decides the chocolate is amazing, the idea is that hopefully others will catch on as well. It could become a topic of conversation gettng the word out there. We considered the advantages and disadvantages of this market by realizing that more money can be correlated with more time and interests, but also that aspects such as gluten free and organics would have to be considered in the production of our product.  

talking about process of picking our choice:

While generating ideas and testing them out , we stumbled upon many diferent ideas rangin from cranbriess to grham cracker. Everyone each laid out and created a chocolate idea they felt would be best suited towards our target market. After discussing our ideas and how they would relate to our primary focus, we opted out of many options such as mixing Peanut Butter and marshmallow, our original idea of Flunnenater .Out opted out of this opetion because The mix of the PB and marshallow  would bring too much disconnect to be able to market. The realizations that less is more started to come into play which fits in perfectly wtih Chauo’s chocolate models as they mix extreme falavors but do not exceed more than 1 extreme flavor. Other opetions we did not go with included a cranberry and almond chocolate mix because this was already a concept that was known well in the world of chocolate. It would be hard to fight with competitors unless our brand could distinguish itself. Being that most of Chuao’s chocolates are very disgintigushable amongst their competiors, it did not seem a good idea to go that route.

4P’s: The company was given the objective to create a new chocolate bar to satisfy the mentioned target market. We will continue to distribute our new product in current retailers coupled with our existing product line. Advertising and promotion will be geared towards children. The company will utilize television, social media, as well promotional size bars netting .39 Oz comparable to our Mini-Bars. Pricing will start low during the promotional period, and will steadily increase with sales.

Being the “Pioneers of Fusion Chocolate” (Denis 2011), our strengths lie in the uniqueness of our brand’s image. Premium chocolate, accompanied by the use of all natural ingredients appeals to our targeted customers. We are a small, family owned company with the intent on stepping into the global market. Our big break came in 2005, when we won a coveted award from the National Association for the Specialty Food Trade, helping put the then three-year-old chocolatier on the culinary map. (Caplan 2012) With the entrance into retail market sales, our company has become nation wide. Our product is available through many avenues.

** lilly adding on to the 4Ps…

“We buy things not only for what they do but also for what they mean to us” . (txtbook pg 39). This concept was extremely important throughout the prodcess of product development be cause that is exactly what Chuao tries to accomplish through its product strategies.