Van Der Steen Candy Company Marketing Case Analysis 1. Identification and explanation of underlying problems and/or issues A) Issues that impact the success of the company: Demographic: 25% business 75% consumers, foot traffic Social/Cultural: Seasonal business, gifts, quality conscious, health conscious Economic: Premium-discretionary item, inflation (ingredient prices) Capital/Legal: haven’t been affected by urban renewal Competitive: Market structure, monopolistic competition (differentiated product, many stores) Strengths of the firm: * Quality of product-Natural ingredients, hand dipped chocolate * Word of mouth * Expert staff-loyal * Joe has a degree * Tradition-unchanged recipe’s/ingredients are recognizable * Price inelasticity * Building and equipment are in excellent condition * Facility available- extra capacity * Variety of candies * Repeat customers-90% * Location- center of downtown * Objectives are measurable Weaknesses for the firm: * * Unchanged recipes and designs since 1855- people want something new * Poor advertising-all word of mouth * Unused facility * Joe lacks experience * Limited selection-only one size box Prices are too low for quality * Limited customer base * Lack economies of scale-limited distribution B) The underlying problem is that the company has an unclear target market. We wouldn’t be able to figure out the limited distribution, formal advertising, or consumable objectives without knowing the target market first. * If the company moves to a more newly developed urban location it could attract more customers to stumble upon the store. People tend to gravitate towards newly developed areas to see what’s offered, and this would make the store more visible, causing more revenue. The company is mainly bringing in revenue from families and businesses. If they reach out to a larger scale of people they would nearly double their earnings. Families and businesses make up a small portion of our society. Everyone enjoys chocolate and candy, so why not reach out to others. * Candy companies are always coming up with new cool candies to attract and excite customers. It’s good to keep traditional candies but at the same time culture is always changing and companies need to stay up to date and offer as much of a variety as possible. The more variety, the more satisfied and loyal customers will be. The company only relies on word of mouth and customer goodwill. These days advertising is a huge aspect of how successful a company is. The new generation is very active with the internet. Making a website is essential in order to get the word out to that large group of willing to pay people. * The company’s goal is to double their sales. This needs to be changed. The goal needs to be surrounded around the customer’s needs. If customers are satisfied they will be willing to come back and profit goals will be met. Without happy, satisfied, and loyal customers high profits have little chance. 2.
Identification and explanation of alternatives * The company should start having local’s night, and offer a bit of a discount. This will make locals feel welcome and important in helping the company succeed. * The company can come up with creative specials of the week to grab interest from customers. This will give them something different and at the same time give something new to look forward to. * The company should invest an amount of money for advertising on billboards or local magazine and newspaper ads. This will help them become more visible and known. Relying on word of mouth isn’t good enough. The employees should be required to attend classes to help them with service, presentation, and manners. This will help give the store a positive reputation. Customers will begin to feel valued, and positive reviews will begin to show up. This will also help to enhance the overall quality of everything the customers are experiencing and receiving. 3. Analysis of Alternatives Locals Night- Advantages: * Locals will feel appreciative of the customer service * Chance to offer promotions and discounts. Disadvantages: * This could get costly after a while, if not enough people show up. Specials of the Week-
Advantages: * This will attract customers. * Customers will get excited and anxious waiting for the new crazy special. Disadvantages: * Coming up with something creative every week can be tough. * Certain specials might require new ingredients that the company doesn’t have in bulk. * This task can cause a lot of extra stress on the company. Advertising- Advantages: * People will see signs/ads and be reminded that the store is there. * People visiting the town would be likely to stop if they see advertisement. * Lots of young adults use the internet a lot and if publicized well, many people would go.
Disadvantages: * This can take up time to get going. * This will add to company costs. * If advertized incorrectly, there can be major problems. 4. Recommendation My favorite alternative that I picked is having specials of the week. I think this option is the best as it allows for innovation in creative thoughts and ideas. Customers always look forward to such promotions and this is a good marketing measure to look into. This idea could bring in large profits from local families, teens, and seniors. The other alternatives that I mentioned also can be successful, but are more demanding in time, effort, and cost.