An analysis of the product policy on the example of the company Ferrero S.p.A


Term Paper, 2021

12 Pages, Grade: 1,0

Anonymous


Excerpt

Table of Contents

Introduction

Theoretical Background

Product Policy of Ferrero S.p.A.

Best Practices

Conclusion

List of Cited Literature

Introduction

Today's fast-moving world brings enormous challenges for companies and requires them to constantly adapt to the needs and expectations of customers as well as to the ever-changing trends in order to preserve and improve their market position. One way of making a decisive contribution to the success of the company is an efficient marketing concept. For companies, marketing is a central aspect of corporate management, which is sometimes quite cost-intensive and therefore, in the best case, should increase returns. Especially for companies that have established themselves in highly competitive markets, this can become a problem, whereby a meticulously planned marketing strategy represents a sustainable investment in the success of the company. In order to achieve this most effectively, various techniques and strategies have been developed. One of these tools includes the marketing mix, which can be used to develop success-oriented marketing concepts.1

The paper deals with the marketing mix from the perspective of product policy, in the context of which a company decides not only on the introduction of new products but also on the elimination of products that are no longer successful. In order to be able to apply this instrument accordingly the product policy is examined with a case study of the company Ferrero S.p. A.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: 4 P’s of marketing-mix

Theoretical Background

The product policy, which according to MEFFERT is the "heart of marketing"2, deals with the design of a product, a service and an assortment. It encompasses all activities of a company that are directed towards the market-oriented design of individual products or the entire sales programme.3 The central focus of product policy is the customer benefit or product benefit, to which the design of the service programme has to be aligned to. The product benefit can be divided into a basic benefit, which is derived from the technical-functional product characteristics, and an additional benefit, which consists of the edification benefit and the prestige benefit. These two special forms of additional benefit are the emotional benefit, which is particularly conveyed by the aesthetic appearance of the product, and the social benefit, which is essentially derived from the product image and helps the brand user to achieve social acceptance.4

As part of its product policy, a company decides on the introduction of new products or product variations to the market and the elimination of products that are no longer successful. This can be done for entire product lines (strategic programming) as well as for individual products within a product line (operational programming).5 In the context of programme planning, it is also spoken of the product programme depth and width, which can alter due to changes made to the product (see Figure 2).

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Figure 2: Depth and Width matrix of product mix6

Product innovation is the development and introduction of new products. It is of significant importance for a company, as the preservation or growth of sales often depends on new products, because they offer the customer new additional benefits for which he is willing to pay.7 In addition, product innovation enables the company to enter new market segments. However, product innovation also involves risks and must therefore be carefully examined and tested as part of the innovation process.8 Product modification is the specific alteration of a product that is already established on the market. The aim is to satisfy customer needs even better with the modified product and to improve the company's competitive position. Product variation pursues the same goal, but here several product variants exist in parallel, which means that the number of products in the range increases. Not only the inclusion of new or improved products in the product range is important but also the abandonment of products that are no longer successful. The reasons can be manifold, e.g. sales difficulties, no profitability, internal resource shortage, increased competition or legal regulations.9

Another important component of the product policy is the brand policy. It describes all the strategic measures taken by companies to develop and strengthen their brands. The brand is a condensed image of a product that is firmly anchored in the consumer's psyche and makes it distinguishable from competing products.10 A distinction must be made here between a single-brand, multi-brand, umbrella-brand and family-brand strategy. A brand has several functions, such as an identification function, continuity function or image function. These characteristics should lead potential customers to prefer the product and ultimately remain loyal to the brand. The additional ideal benefit conveyed by the brand also gives the company pricing leeway over the competition.11

Another sub-area of the product policy is the packaging policy. The aim of packaging policy is to package the product in a way that is both sales- and market-oriented. On the one hand, packaging should keep transport and storage costs as low as possible, and on the other hand, its attractiveness should encourage consumers to buy. Packaging spreads messages about its content via design, layout and material.12

Product Policy of Ferrero S.p.A.

The international Ferrero S.p.A. Group is one of the world's largest confectionery producers, has 31 production sites and sells its products in more than 170 countries. The confectionery manufacturer was founded in 1946 by Pietro Ferrero in Italy. The company is still family-owned and is currently managed by Giovanni Ferrero. In 2020, Ferrero generated total sales of €12.3 billion, representing a 7.8% year-on-year growth in sales. The company's product range includes not only chocolates but also snacks, bars, spreads, ice cream, chilled snacks and dragées & chewing gums. The product range varies depending on the sales market and is always aligned with regional preferences. The products of the Ferrero umbrella brand are marketed under different brands. In total, 28 single brands belong to the umbrella brand. The best-known brands include Nutella, Duplo, Hanuta, Kinder, Tic Tac and Mon Chéri.13 Figure 3 shows part of the confectionery manufacturer's product range:

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Editorial note: This image was removed due to copyright issues.

Figure 3: Product lineup of Ferrero 14

For all brands, the principle is to extend the maturity phase within the life cycles of the products as long as possible and to continue this continuously with occasional adjustments. With regard to the company's marketing, it quickly becomes clear that this has a high priority. In Germany, for example, Ferrero ranked second among the companies with the highest advertising expenditure in 2020, with an advertising expenditure of around 455 million euros.15

[...]


1 Cf. Thommen et al. 2020: Allgemeine Betriebswirtschaftslehre, p. 146

2 Meffert et al. 2019: Marketing, p. 395

3 Cf. Scharf/Schubert/Hehn 2015: Marketing, p. 245

4 Cf. Meffert et al. 2019: Marketing, p. 396

5 Cf. Meffert et al. 2019: Marketing, p. 398–400

6 Adapted from: Rennhak; Opresnik, Marketing: Grundlagen 2016 , p. 70

7 Cf. Scharf/Schubert/Hehn 2015: Marketing, p. 71–72

8 Cf. Bruhn 2019: Marketing, p. 136

9 Cf. Scharf/Schubert/Hehn 2015: Marketing, p. 257–260

10 Rennhak/Opresnik 2016: Marketing: Grundlagen, p. 63

11 Cf. Rennhak/Opresnik 2016: Marketing: Grundlagen, p. 63–64

12 Cf. Spiller/Achim 2019: Marketing-Basics, p. 155–156

13 https://www.ferrero.de/

14 https://www.foodaktuell.ch/2017/10/17/ferrero-steigt-ins-glacegeschaeft/

15 https://de-statista-com.ezproxy.hs-neu-ulm.de/prognosen/164632/groesste-werbungtreibende-nach-werbeausgaben-2010

Excerpt out of 12 pages

Details

Title
An analysis of the product policy on the example of the company Ferrero S.p.A
College
University of Applied Sciences Neu-Ulm
Course
Marketing
Grade
1,0
Year
2021
Pages
12
Catalog Number
V1132460
ISBN (eBook)
9783346542311
ISBN (Book)
9783346542328
Language
English
Keywords
Ferrero, Marketing, Product policy
Quote paper
Anonymous, 2021, An analysis of the product policy on the example of the company Ferrero S.p.A, Munich, GRIN Verlag, https://www.grin.com/document/1132460

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