Ica 1-1: In-Class Activity

ICA 1-1: IN-CLASS ACTIVITY

Designing a Candy Bar[1]

Learning Objectives. To have students: (1) define a target market segment and develop a simple marketing program for a product they are familiar with; (2) value the practice of working in a team when engaging in the aforementioned aspects of the marketing function; and (3) develop presentation skills they may need for later in the course.

Nature of the Activity. To have students design a candy bar by specifying its target market, marketing mix elements, and points of difference during the first class meeting.

Estimated Class Time. 30 minutes.

Materials Needed.

· The Ghirardelli® Milk Chocolate with Caramel Squares bar from the Instructor’s Survival Kit box.

· Samples of other candy bars that represent a variety of kinds (composition: chocolate, caramel, peanuts, etc.; form: bar, drop, bundle, etc.; sugar/nonsugar; etc.) sold in the U.S. and that students may be familiar with. Purchase several of the following:

– Hershey’s: Milk Chocolate Bar, Kisses, Swoops, 1 Gram Sugar Carb Bar,
Sugar Free Chocolate Candy, Reese’s Pieces, etc.

– Mars: M&Ms, Snickers, Milky Way Bar, etc.

– Nestlé’s: Milk Chocolate Bar, Crunch Bar, Buncha Crunch, Butterfinger,
Baby Ruth, Skittles, etc.

– Other candy bars of interest.

To buy the Ghirardelli Milk Chocolate with Caramel Squares stand-up bag (see
Slide 1-3), you will need to go to a local grocery store or mass merchandiser
(Wal-Mart or Target). Estimated cost: $3.25 per 5.32 ounce (~10 count). To purchase one of the other candy options in bulk (Hershey’s Milk Chocolate bar or Nestlé’s Crunch Bar), go to your local mass merchandiser (Wal-Mart or Target) or warehouse club (Sam’s Club or Costco). Estimated cost: $15.00 per 36 count
(Sam’s Club).

· Copies of the Designing a Candy Bar Handout.

· Easel with markers or black/white board markers/chalk for students to write on/with.

Preparation Before Class. Follow the steps below:

1. Read pp. 12-13, 15 of Chapter 1.

2. Read, and if necessary, edit and print the CH01.doc Word file and the slides from the CH01.ppt PowerPoint file for this ICA.

3. Get easels and markers of sufficient quantity for the number of student teams.

4. Make copies of the Designing a Candy Bar Handout for each student.

5. OPTIONAL: Bookmark the following websites on your classroom computer to view a variety of candy bars from the top three U.S. candy marketers:

• Ghirardelli Chocolate: www.ghirardelli.com.

• Hershey’s: www.hersheys.com/products/chocolate.asp.

• Mars: http://www.mars.com/global/Who+We+Are/Who+We+Are.htm

• Nestlé: www.nestleusa.com/PubOurBrands/Overview.aspx.

Instructions. Follow the steps below to conduct this ICA:

1. Spend 1 minute and give the following mini-lecture about marketers and their responsibilities:

“All of you purchase products and services every day, ranging from necessities, such as food, clothing, and shelter, to discretionary items, such as candy, music, and education. And marketers develop many of these products and services with you specifically in mind—just look at the stores in and around campus that cater to you!

To offer these products and services, marketers must first understand your needs and wants. Then, they must:

• develop the features and benefits for the products and services that you desire;

• charge a price that you are able and willing to pay;

• inform you that the product or service exists, where it can be purchased, and perhaps offer you a small inducement to try it;

• make it available at locations where you are likely to buy it;

• ensure that it is superior to similar offerings available from competitors; and

• earn a profit for the organization.”

2. Spend 3 minutes and ask students the following questions about their candy purchasing behavior:

· Question 1: How many of you buy candy? Why?

Answer: Students buy candy for a variety of reasons (taste, energy, holiday, etc.).

Answer: Students will have bought candy from Ghirardelli, Hershey’s, Mars, etc.

· Question 3: Have you tried any new candy within the past 1-3 months? If so, what was it? Did you like it? How did you find out about it?

Answer: Most likely, students will have tried a new candy product.

3. Show Slide 1-3 and give the following mini-lecture to students.

“The Ghirardelli Chocolate Company has produced and marketed premium chocolate products for over 150 years. These products include bars, hot cocoa, and seasonal items in ‘a variety of delectable flavors.’ Recently, Ghirardelli introduced a line of ‘Squares’ chocolates, one of the most popular being the Ghirardelli Milk Chocolate with Caramel Squares.”

4. Show Slide 1-4 and pass out the Designing a Candy Bar Handout to students.

5. Show Slide 1-5, play the TV ad, and spend 5 minutes asking students the following questions about the ad using the handout as a guide:

“Ghirardelli recently launched the TV ad that you just saw to promote its Ghirardelli Milk Chocolate with Caramel Squares. I’d like to ask you a few questions about the ad:

a. Who is the target audience or market? Women.

b. What were the key features or benefits of the Ghirardelli Milk Chocolate with Caramel Squares? Intense chocolate experience; aroma; silky smooth texture; slow melting chocolate.

c. As shown earlier [go back to Slide 1-3, if necessary], what would you charge for a bag of 10 of these ‘Squares’? Why do you think Ghirardelli charges this price? The retail price is about $2.99-$3.50 for a bag of 10 ‘Squares.’ Ghirardelli charges this price because it wants to convey quality, prestige, etc.

d. Why do you think Ghirardelli developed a TV ad for this product? To reach women more effectively than other media (radio, newspapers, magazines, Internet, etc.).

e. Where do you think consumers would buy this product? Grocery stores, mass merchandisers (Wal-Mart, Target, etc.).

f. How is your candy bar different from those already on the market? Unique shape, rich taste, high quality chocolate.”

6. Form students into 4-person teams.

“For the next 15 minutes, your team will design a candy bar based on your personal experiences as candy bar consumers and your new role as potential marketers. When designing your candy bar, be as creative as you can. However, the candy bar you design must answer the following questions, as shown in the handout:

a. Where and to whom will your candy bar be sold? The answer to this question will specify the geographic location (U.S., Europe, etc.) and the characteristics (age, gender, income, health-consciousness, etc.) of your target market segments. Provide a rationale for the market segments you select.

b. What is the product? The answer to this question will specify the features, such as the ingredients, form, size, packaging, etc. and benefits of the candy bar you think are important to consumers. Provide a rationale for the product you create.

c. How much will consumers pay for it? The answer to this question will specify the price paid for the quantity received by consumers. Provide a rationale for the price you want to charge.

d. How will consumers find out about it? The answer to this question will specify the advertising methods and message you will use to communicate to consumers about the candy bar and the kinds of inducements (coupons, samples, etc.) you will offer them to try it. Provide a rationale for the promotions you want to use.

e. Where will consumers buy it? The answer to this question will specify the types of retail outlets or “place” where consumers in your target market are likely to buy the candy bar. Provide a rationale for the distribution channels you want to use.

f. How is your candy bar different from those already on the market? The answer to this question will specify the significant points of difference of your candy bar. Provide a rationale for why your candy bar is superior to those offered by the competition.”

7. Give the following instructions to complete this ICA:

c. How much will consumers pay for it? The answer to this question will specify the price paid for the quantity received by consumers. Provide a rationale for the price you want to charge.

8. When the 15-minute time is up, spend 5 minutes and have one student from each team take a marker/chalk and go to the easel and/or black/white board and write down their answers to the six questions asked in the Designing a Candy Bar Handout.

9. Spend 5-10 minutes to discuss and compare the marketing programs that the student team developed for their candy bars. Ask the following questions of the entire class for discussion and probe their responses:

a. Target market. Is it attractive enough (large, growing, etc.) to warrant the expense of a marketing effort?

b. Product. What features/benefits are important to prospective customers? Can they form the basis of a message that can be effectively communicated?

c. Price. What is the price based on? Do you want to recover marketing costs quickly by charging a higher price or do you want to achieve larger sales earlier by charging a lower price?

d. Promotion. What relatively inexpensive actions could you use to inform and induce prospective customers to try your product?

e. Place/Distribution. What traditional outlets? Will you sell your product over the Internet? Why?

f. Points of difference. Does your product provide overall customer value?

Marketing Lessons. This ICA introduces students to the essential concepts of marketing that marketing and product managers deal with on a daily basis. Students should conclude that when developing a marketing program for a product, marketers must: (a) select a set of market segments to target; (b) specify the marketing mix; and (c) identify significant points of difference.

Websites. The candy marketers’ websites are: Ghirardelli: www.ghirardelli.com; Hershey’s: www.hersheys.com; Mars: www.mars.com; and Nestlé: www.nestleusa.com.

DESIGNING A CANDY BAR HANDOUT

MARKETING PROGRAM AND POINTS OF DIFFERENCE /

COUNTRY AND TO WHOM WILL IT BE SOLD?(TARGET MARKET SEGMENTS)

Country?

To Whom?

What is it?
(Product)
Specify features, benefits, form, size, etc. and why
How much will consumers pay for it?
(Price)
Specify cost
and why
How will consumers find out about it?
(Promotion)
Specify methods to inform and generate trial and why
Where will consumers buy it?
(Place)
Specify types of retailers and why
How is it different from others?
(Points of Difference)
Specify why it is superior to the competition

a. Target market. Is it attractive enough (large, growing, etc.) to warrant the expense of a marketing effort?

b. Product. What features/benefits are important to prospective customers? Can they form the basis of a message that can be effectively communicated?

c. Price. What is the price based on? Do you want to recover marketing costs quickly by charging a higher price or do you want to achieve larger sales earlier by charging a lower price?

d. Promotion. What relatively inexpensive actions could you use to inform and induce prospective customers to try your product?

e. Place/Distribution. What traditional outlets? Will you sell your product over the Internet? Why?