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Tony’s chocolonely Part 2: Launching strategy

Launch in Sweden 2015

NEW PRODUCT COMMERCIALICATION TUDELFT 2014 “FROM BEAN TO SPRINKLE” HuiChun Wu - 4318900 / Loes Wagter - 4330285 / Renske Voorn-Moerman - 1355538 / Sergio Castellanos Arciniega - 4328027 / Trine Gedde - 432325

TABLE OF CONTENTS Table of contents Introduction & Previous report


Executive Summary 5 Assumptions & Strategy


Product 8 - 13 Place 14 - 15 Price 16 - 17 Promotion 18 - 21 Sales & marketing forecasts

22 - 25

Conclusion & References

26 - 27

Appendix one - survey




Introduction & Previous Report Introduction The goal of this course was to introduce sprinkles into the Swedish market. Therefore the name ‘From bean to sprinkle’ came up. In this report you can find the introduction of the chocolate plates which will be the jumpboard of the sprinkles. In the first lecture of Tony’s there was an explanation about the ‘From bean to bar’ concept. In this report you can find the sequel of this story: ‘From bar to sprinkle’ which will make the sequence complete from ‘bean to sprinkle’.

Previous Report The previous report presented an analysis of the Swedish chocolate market, the different competitors playing in the market and research from chocolate consumers in Sweden. Important findings were presented which guided the proposed launching strategy for Tony’s Chocolonely in Sweden. Below you can find a short summary of the findings from the ‘Market and company analysis report’. Tony’s Chocolonely is a chocolate brand from the Netherlands which is originated from the strong mission to make the cocoa industry slavery free. This cheerful brand has a strong vision and wants to be the example of a chocolate producer by making a delicious and honest product. The brand is social

and transparent about the pros and cons of the products they make. For the planned introduction in Sweden, Tony’s need is some adaption to gather a place in this very large candy market. In Sweden sustainable living is very important and Fairtrade and organic products are getting increasingly popular. Therefore there are already a lot of Fairtrade brands in the Swedish chocolate market. Tony’s can distinguish itself by focusing on the importance of the slavery free industry and adapt itself on products focused on the Swedish consumers and traditions. The report proposed to enter the market via niche markets in Sweden such as Fairtrade stores, coffee bars, candy shops and vending machines. The mass market was initially avoided due to powerful competitors which require very extensive resource commitments and high costs of distributing through supermarkets. The advantage of choosing niche market is to build up brand awareness and brand loyalty among fewer consumers and to become the chocolate brand known as ‘the slavery free chocolate’. After gaining brand awareness in Fairtrade and organic stores the market is hopefully ready for finding Tony’s in supermarkets as well. The goal after launching in supermarkets is stepping into ‘the bread and breakfast market’, by developing and launching chocolate to put on your bread. The proposal from last phase was to first launch the brand through chocolate bars and ‘Tiny Tony’s’ and then launch chocolate plates to gain market share in the breakfast segment since the Swedish market is not familiar with either the brand or sprinkles. When this is successfully done and brand awareness is built up around Tony’s Chocolonely - new products could be launched in the Swedish market.


Executive Summary Executive summary Tony’s Chocolonely is a chocolate brand from the Netherlands which is originated from the strong mission to make the cocoa industry slavery free. They have planned to move to Sweden and sell their delicious chocolate over there. We take a jump in time and go to the moment where the bars are already sold, and steps will be taken to move into the breakfast market. The first product will be chocolate plates which are called ‘Flinga’, very thin plates which can be put on bread, crackers (knäkkabröd) or cake. The product has a circular shape and is, just like the bars, unequally divided to get attention for the unequally divided chocolate market. The unequally division is also there to get people used to the idea that chocolate can not only be put on your bread as a whole plate but it can also be broken in pieces to be able to put small chocolate pieces on your bread. Decorating bread with these pieces will encourage fun and it also enables the Swedes get used to Tony’s next product; chocolate sprinkles. The target group for Flinga are children within the age of 5-12, and their parents. Tony’s Flinga will be sold in supermarkets and the price will be kr28,20 SEK which is equivalent to €3,12 euros. The promotion will be done by contests for children and educational packages to spread the word of the unequal division of the chocolate industry. Tony Chocolonely will be breakeven with this product within the first year and will be able to introduce the sprinkles after a 50% of brand awareness is gained.



Assumptions and Strategy Introduction Assumptions and Strategy Based on the findings in the previous report this chapter will describe a launching strategy for chocolate plates. Before launching the chocolate plates brand awareness through the introduction of the chocolate bars and Tiny Tony’s is created. Nevertheless this is not addressed in this report. Therefore assumptions on what is likely to happen are made. This chapter includes the assumptions on the chocolate bars and Tiny Tony’s introduction, an objective and a strategy for the launch of chocolate plates.

As mentioned in the introduction the first report ended with the objective for Tony’s Chocolonely to launch themselves in Sweden and gaining brand loyalty. In this report there will be made a jump in time to the moment where Tony’s has launched their chocolate bars and Tiny Tony’s and sold in organic-, fairtrade-, ecological, and candy shops and vending machines. 30% of the Swedish population is aware of the brand and the brand awareness is still growing. Tony’s is known in Sweden as a fun brand with a clear vision on the chocolate industry. From this position we will have the following objective:

“Starting from the beginning of 2018 in preparing the Swedish breakfast market for the launch of sprinkles and broaden fair chocolate consciousness to the Swedish population - the awareness about the brand Tony’s Chocolonely will be increased from 30% to 50% in Sweden in two years time. “

Product strategy

variety-based positioning

In this report Tony’s is starting making a shift to a different market; the breakfast market. The final goal for Tony’s is to launch sprinkles in Sweden, but because the Swedish population is not familiar with sprinkles Tony’s will start introducing chocolate plates to put on your bread. This product is already sold in Sweden and well known as a treat on your bread. Especially children love the idea of chocolate on their bread but because the Swedish are very health focussed and make sure they really eat healthy everyday (From beans to sprinkles, 2014), the product should really focus on children. The children will be the users of the product and their parents are the buyers of the product, so both need to be taken into consideration in targeting the product. With this target group we create a variety-based positioning (Porter, 1996), making a product which fulfills a small need for a lot of people. (see Figure 1) The small need is spreads on sandwiches. The “a lot of people” are children and their parents: Families. Nevertheless this is the target group for the first two years to get into the market, later on more people will use this chocolate product once it gained product awareness.

Few needs: Breakfast spreads

Lot of people: Families

Figure 1 Variety-based positioning Porter (1996)

Brand strategy The strategy of Tony’s is to create products in their own way, with their own vision, or as Beverland et. al. (2010) would call it; Tony’s Chocolonely is a craft-designer brand (see Figure 2). They make incremental products, already existing in the market, but with minor improvements and a lot of added value. The products they sell are really created from inside out, from the mission of Tony’s to improve the chocolate industry. Tony’s is also driving the market, trying to make the chocolate industry slavery free and to make sure everyone


Follower Brands


Craft-Designer Brands DRIVING MARKETS

MARKET DRIVEN Category Leader Brands

Product Leader Brands RADICAL

Figure 2 Chololat plates innovation type. Beverland (2010)


Assumptions and Strategy can easily copy the principle - not really competitive sustainable, but very good for the world. Nevertheless a sustainable competitive advantage can be found in the “fun” approach in the launch of the plates. The challenge is to promote through the target group instead of through commercialisation. In this way Tony’s core values are the base of their promotion and will be sent out through their products. By choosing the new target group of children and their parents, the most important values of Tony’s, fun and fair trade, can become outstanding.

Launching strategy For launching the plates all the touchpoints will fall under one umbrella; fun, fair & share. This will complement the core strategy of spreading the world with Tony’s vision. Even though they are already spreading the vision well these three main terms are especially suitable for the plates: Fun (creating cheerful products), fair (products are created in an honest way) and share (sharing chocolate and the honest vision of Tony’s).

Further on in this report you can find the strategy specified in the new product, the place, promotion and pricing of the chocolate plates. In the end there will also be a future vision on Tony’s in Sweden and recommendations for the launch in Sweden.

Conclusion Assumptions & Strategy This report will take a leap in time to the the moment when chocolate bars are being sold and Tony’s is known in Sweden. Chocolate plates will be launched for breakfast market with young families as target group. To be able to launch sprinkles after a period of time in the Swedish market, the Swedes needs to be prepared through a familiar breakfast product targeted to the whole Swedish population.

Figure 3 Strategy 2018 Fun, Fair, Share campain.



Product Introduction product As sprinkles are not known in Sweden, we strongly believe it is not a good strategy to introduce that type of product right away. The proposed product for Tony Chocolonely is instead a thin chocolate plate called “Flinga” (means flake in Swedish) intended to use as a sweet topping on a slice of bread for breakfast or on cakes for “Fika”. The plates, which is a familiar product in Sweden, is a proper step into the breakfast market and will sett the stage for sprinkles. By adding a new product variant to the portfolio, Tony’s can attract new customers and create stronger brand awareness and satisfaction among existing customers. To gain customer acceptance, a concept that delivers the right quality in terms of appearance, price and usage is preferred and will be explained later in the report. There is always a concern of either cannibalization of current products or detrimental action for the brand by introducing the wrong product to the marking. Using an unsuccessful product for the launching strategy, which differ in quality, can in worst case scenario lead to customer defection (Lehmann and Winer, 2005). To avoid this a survey was created to test the new product among the Swedish consumers with questions focusing on uniqueness, product relevance and purchase intention (See appendix one). The responses indicated that the proposed product attracts interest with references to Danish traditions [the plates are originally from Denmark]

and nostalgia to family holidays, whereas some people did not per se understand the purpose and value of the product. It is worth mentioning that only 14 people responded the questionnaire which is not enough participants to generalize the opinions. However, with the remarks from the participants we emphasize the importance of explaining intended product use and telling a convincing story behind the product in order to gain trust and acceptance. Complexity in use of understanding can make customers believe they need new skills or training to use the product correctly (Guiltinan, 1999). By reading on swedish discussion forums, it is clear that Swedes are crazy about the thin chocolate plates (Flashback. org, 2014), and people mention this as one of the things they miss the most when going abroad. With this in mind we believe there is an opportunity for Tony’s to get acceptance for their new product in Sweden.

Product Specification:

Product form Figures 4 & 5 present our proposed chocolate product with further specification and details. The chocolate plates are designed with the structure of the unequal divided pieces from the current bars in mind (based on the map of West Africa, see Figure 6), in order to bring the Tony’s strong message about the the inequality in the cacao trade to the new breakfast audience. The space thickness between each piece is only 1mm to make it possible to easily divide the chocolate. The plate can either be placed directly on a slice of bread or divided into smaller pieces for a more fun experience. Suggestions for decoration can be seen in figure 7. To decorate the bread with smaller pieces of chocolate is a creative activity for the kids, especially during weekend breakfasts (“Långfrukust=long breakfast”). Breakfast is by many

Diameter: 90mm Thickness: 1.5mm / 1mm Weight per plate: 10g Weight per package: 240g # plates in package: 24 pieces Dimensions package: H: 80mm Ø: 100mm Figure 4 Product specifications

Figure 6 Shapes of Africa Figure 5 Chocolat plates milk and pure


product tradition is originated from Denmark so most of the sources are in Danish). Several important factors about the design should be present to get acceptance in the market; smell, sound [when you break the plate], taste, appearance [pattern], aroma, color, thickness, shape and size are all variables that influence how it is perceived by the target group. According to a blind test performed by a local newspaper in Denmark (, 2014) with a panel existing of 8 confectioners and children, some interesting opinions were stated about the different brands tested: Figure 7 Ways to decorate Swedes considered to be the most important meal of the day and during the weekend it is perceived as an important time for social gathering (Kotimaisten kielten keskus, 2014). At this time the members of the family have more time to share stories with each other and more sweet topping for bread is often placed on the table. If Tony’s chocolate plate is successfully introduced on the Swedish breakfast table, there is a bigger chance that questions about the unequal parts of the chocolate are brought up by the kids. Tony’s ideology can be discussed and information written on the package can help parents explain the situation in todays chocolate industry. Great opportunities for seasonal Tony Chocolonely campaigns for are suitable for the decoration activity. Eg. during christmas the package can show inspirational images of different christmas symbols decorated with chocolate. The job that needs to be done in order to create a lucrative chocolate plate require careful consideration (Clayton, 2007). The chocolate plate lovers are picky about product details. (User information is obtained from Danish sources since the

Jeppe: “The smell is too sweet [Toms Chokoladepålæg] and the taste is not very rich”.

Louise 24y: “I don’t eat them [the plates] anymore, but I used to when I was younger! I don’t eat them because I don’t really like the taste - it doesn’t taste like real quality chocolate”. Moreover she made it clear that the plates are something special and nostalgic:

“The best thing is when they are a bit melted, but not totally. They need to be still a bit crunchy in the middle. That is very important.”

Jakob: “Actually, it does not taste really good” Andreas: “Nice pattern [Carletti Ecological], but it misses the ‘break’ sound”. Frederik: “I can see it is Galle & Jessen, which we usually eat - but I am disappointed. It is grainy and sugary. Nonsense.” The plates from Carletti and Galle & Jessen contain mostly sugar and only 43% cacao mass, while the Toms Gold has content of 57%, but is also the most expensive. Level of cacao content is according to the panel in the test correlated with perception of quality and can become a competitive advantage for Tony’s since they strive to deliver delicious, high quality chocolate [72% cacao content] and not only sugar, cacao butter and emulgator in their products. The importance of quality chocolate was also underlined when we interviewed a danish chocolate eater about the plates:


Figure 8 levels of competitor


product We advise Tony’s to launch both their milk chocolate and pure dark to satisfy the part of the audience who appreciate high level of cacao in their chocolate and to tempt healthy hedonists.

Differentiation The three danish brands presented in figure 9, Carletti, Toms and Galle & Jessen, are also the biggest brands distributing chocolate plates to Sweden where the latter are both owned by the same company. By addressing the same needs with more or less similar resources (Bergen and Peteraf, 2002) , they

are all direct competitors placed in the same product category which can be seen in the levels of competitor visualisation figure 8. Among these brands blue color is used to identity dark chocolate plates, whereas the lighter milk versions are presented with red (see figure 9). Luckily, Tony’s color coding is similar, with blue for dark- and red for milk chocolate, which will prevent confusion among existing customers and also remain the link to the other products from their portfolio. In our first report, where we asked the Swedish population about their opinions about the packaging, it was clear that it was perceived as childish, but playful. This is something we

Figure 10 Packaging design

Dark chocolate

want to remain since we are targeting kids from 5-12 years old who most normally appreciate colorful products and big logos. Regarding Porter is ‘competitive strategy’ about being different and choosing a special set of activities to deliver a unique mix of value (Porter, 1996). However, making use of primary colors on a big surface of the package as Tony Chocolonely currently are presenting their products, is not unique in this product segment and will not differentiate from the competitors. A way Tony’s could stand out is with a new shape since their colors are quite similar to what already exist in the shelves. Most of the competing brands produce rectangular plates which is a great opportunity for creating a competitive advantage for Tony’s. This is the reason why a circular shape of the plates is proposed and moreover to create an analogy to the shape of the globe to emphasize their vision. In addition is the original shape of crispbread (“knekkebrød”) circular, which creates connections to old, Swedish traditions.

Light chocolate

Figure 9 The biggest players in the market are astonishing similar in terms of color, shape of packaging and appearance of the plates.


product Packaging To suit a stack of circular chocolate plates is a cylindrical shape proposed for the packaging. Figure 10 shows the design of the packaging. An open/close hatch is places at the bottom of the cylinder, gravity pushes the plates down and an angled plane inside the package enables the plates to slide out and into your hand. The height up to the opening [15mm] is to prevent the plates to touch the table so that they do not break. This open space can be utilized with small gifts, games or more information about Tony’s vision, Figure 11 shows that the packaging contains 24 pieces of thin chocolate plates, inside a cylinder. It is supposed to be an easy and fun experience to take the plates out of the packaging. The package layout will be printed on matte cardboard to build on the sustainable values and keep costs down by not including multiple materials. A picture of the circular chocolate

plate placed on bread on top of the package clearly shows the intended use of the product. The back of the wrapping shows a picture of the ‘broken’ pieces decorating the bread in a more creative way with a text explaining: “....or decorate with more fun!” which is in style with Tony’s values. All the text on the package will be translated into Swedish when it is ready for shipping. It is important to avoid that the plates break during transport as they are quite thin. The height is based on test of existing choclate plates and also our own design of a chocolate mold. We tried to melt and create our own chocolate and realised that the plates easily break. It is important to not make the plates too thick (in terms of a picky target group), so 1.5mm seems to be the ideal thickness. A stack of 24 plates are protected with corrugated cardboard and placed in a circular cardboard box. 24 or 30 pieces is normally found in a wrapping and is a number the consumers are familiar with. This is important when they compare quality [in the store] related to cacao content, ingredients and affection with price.

80 mm

100 mm Figure 12 Printing molds and tries of molding choclat plates.

Figure 11 Inside of packaging



Assortment With the plate as a starting point, new flavours, shapes, colors and patterns can be added and we advise Tony’s Chocolonely to build up a diverse assortment. The Danish interviewer ended the interview with a quote which argue for a chocolate plate which can be used for decoration and is a inspiration for launching different plates to broaden the assortment:

Join Tonyʻs Contest!


“I think I liked the dark one the most, but actually the best part was if I had both light and dark so that I could mix them. Maybe I used one dark and broke the light in half so that it could fit better on the bread”



Towards 100% slavefree chocolate

24 pcs See instructions:

Pull here! Best before: 10/12/19

Draw your ideal fair world!

pure 72%

pure 72%

pure 72%

pure 72%

pure 72%

pure 72%

pure 72%

pure 72%

pure 72%

pure 72%

pure 72%


Danish chocolate eater 24 years old

Tonyʻs FLINGA Ingredients: Full Cream Milk, Sugar, Cocoa Butter, Cocoa Mass, Milk Solids, Emulsifiers (Soy Lecithin, 476), Flavours. Milk Chocolate contains Cocoa Solids 26%, Milk Solids 28%. Allergen Statement: Contains Milk and Soy. May contain traces of Wheat, Egg, Peanuts and Tree Nuts.

Line extension is a popular way to capitalize on the original brand’s equity (Lehmann and Winer, 2005), and there are many possibilities for extending the assortment in creative directions. Tony Chocolonely share fun and joy by experimenting with ingredients and they often launch seasonal flavoured chocolate. The latter has a potential for the plate as well where chocolate with nuts, berries or salt are examples of interesting combinations which also could work well on bread or cakes.

Tonyʻs Factory Plonoceauke 12 1014 DA Amsterdam Chocolate maker since 2005

Join Tonyʻs Contest!




Towards 100% slavefree chocolate

24 pcs See instructions:

Pull here! Draw your ideal fair world!

Best before: 10/12/19

melk melk melk melk melk melk melk melk melk melk melk melk melk melk melk melk melk melk melk melk melk melk melk

Tonyʻs FLINGA Ingredients: Full Cream Milk, Sugar, Cocoa Butter, Cocoa Mass, Milk Solids, Emulsifiers (Soy Lecithin, 476), Flavours. Milk Chocolate contains Cocoa Solids 26%, Milk Solids 28%. Allergen Statement: Contains Milk and Soy. May contain traces of Wheat, Egg, Peanuts and Tree Nuts.

Tonyʻs Factory Plonoceauke 12 1014 DA Amsterdam Chocolate maker since 2005

Figure 13 Packaging for milk and pure chocolat


Conclusion Product Our proposal for the product is to manufacture a thin chocolate plate designed to put on bread, normally eaten for breakfast or as a sweet treat for Fika. Tony’s Chocolonely is an underdog in the chocolate plate market in Sweden compared to competing brands, such as Toms, Galle & Jessen and Carletti, and will need to take action in order to stand out in the shelves. Our differentiation strategy involves designing a circular plate which differs from the competitors who mainly produce rectangular shapes. The plates is divided into unequally pieces - and the pattern will bring Tony’s message about unfairness in the chocolate industry to a new audience by introducing the product on the breakfast table. With the small pieces of chocolate the target group can decorate their bread which is a fun and social activity. Furthermore it involves ‘sharing’ in terms of telling histories, memories and dreams. Decoration bread with smaller pieces of chocolate is a natural transition towards sprinkles in near future. The next chapter presents the distribution strategy and covers the intended place of product. Figure 15 Chocolat plates milk & pure. Figure 14 experimenting with decorating bread.



place • Fairtrade Stores (eg. Fair Trade Shop)

Introduction place In terms of place, we first used the analytical outcome concluded from our first report, so we choose the five biggest cities- Stockholm, Göteborg, Malmö, Uppsala and Linköping for launching Tony’s products. Since almost 1/3 of the population lives in these cities, Tony’s products can be promoted to more Swedish consumers than introducing in other cities. Hence, following by different time slots, we create an overall distribution channel tactic to promote Tony’s chocolate bars, Tiny Tony’s and chocolate plate in Sweden.

According to our strategy, Tony will introduce chocolate bars and Tiny Tony’s in 2015, and then they will release chocolate plates three years later. Due to Tony’s limited budget, they don’t want to choose mainstream supermarket. Therefore, selective distribution strategy (Williamson, 2012) is chosen in this situation to sell Tony’s chocolate bars in Sweden. Selective distribution is a market coverage strategy of selling a limited number of retailers to distribute a firm’s products. (Williamson, 2012) It can help Tony to have more control on the retailers, and it also cost less than intensive distribution. (, 2014)

Place Strategy | 2015 - 2017 for chocolate bars and Tiny Tony’s Retailers: • Bio/Eco Shops (eg. Goodstore, Ekoaffaren)*

• Candy Stores (eg. Caramella, House of Candy, NK Konfektyr) - mainly for selling Tiny Tony’s • Coffee Bars (eg. Wayne’s Coffee, Espresso House, Bonor och blad) • * Requires that Tony Chocolonely meet the requirements for eco-certification.

Automatic merchandising: • Vending Machines - focusing on subway stations and universities During the first three years from launch of Tony’s in Sweden, they can arise customers’ awareness certainly. Thus, the place strategy can move to Intensive distribution which is the most common strategy for snack food, beverage, and other daily products. (Williamson, 2012) Intensive distribution strategy is used to achieve market saturation by placing products in every available outlet. Joseph P. Guiltinan indicated that the best strategy for new (to the firm) product lines that enter established market is trial and repurchase where buyers will likely be familiar with how the product is used and the usage system. Moreover, the new products which can be categorized into the quadrant of low relative advantage and high compatibility are recommended to use intensive distribution and narrow product assortment. (Joseph P. Guiltinan, 1999) Therefore, we choose mainstream supermarkets, grocery stores, and convenience stores as the place strategy for Tony’s to launch only chocolate plate because it is the usual way for consumers to buy daily goods. The short indirect channel is suitable in this case, so the products are transported from producer (Tony’s Chocolonely) to wholesalers to retailers (mainstream supermarkets, grocery stores, and convenience stores) and then customers can go to stores to purchase the products finally. A wholesaler


is important because intensive distribution requires the use of wholesalers to achieve a maximum distribution effort (Williamson, 2012). Furthermore, there are not a lot of employees from Tony’s in Sweden, they cannot have enough human resources to deal with extensive communication with different distribution channels and related logistics. Not to mention the language and culture differences they might encounter, so building good relationship with some wholesalers is essential for them. Wholesaling intermediaries can be classified on the basis of ownership. Some are owned by manufacturers, some by retailers, and others are independent organizations. (Williamson, 2012) We suggest Tony’s to have their own wholesale in Sweden immediately when they launch chocolate bars and Tiny Tony’s in 2015. The size of Tony’s wholesale will not be large since they might not afford the fixed cost to rent the place. After Tony has arranged their own wholesale, they can build connections with other wholesales to deliver their food to the supermarkets. And the best locations for their wholesales are in Stockholm and Göteborg because most Swedish population live in these cities and having wholesales there can help Tony deliver their products in an efficient way.

Place Strategy | 2018 for chocolate plates Wholesaler: • Tony’s own Wholesaler- starting from the first year of launching chocolate bars • Wholesaler in Sweden within Food products and beverages (eg. Relation Reminder AB, Carbona AB)


place • Hypermarkets (eg. Coop Forum) • Supermarkets (eg ICA Kvantum, Hemköp) • Convenience Stores (eg. 7-ELEVEN, Pressbyrån) After launching chocolate plates on supermarkets, because the final goal of our proposal is to prepare the breakfast market for sprinkles, our distribution channels might expand to several places related to breakfast. Nevertheless, the distribution channels of chocolate bars and Tiny Tony’s will remain the same such as bio/ eco shops, fairtrade stores, candy stores, coffee bars, candy shops and vending machines, because of product

differentiation. The cost prices of normal retailers and mainstream supermarket are different, so if chocolate bars are sold in the supermarkets, the lower price might attract consumers from the normal retailers. Therefore, the cannibalization within Tony’s products will not make more profits for Tony’s. In fact, if there are same numbers of consumers purchasing chocolate bars in the supermarket as in normal retailers, the profits generated from the supermarkets are less than the normal retailers. Therefore, we suggest only to sell Tony’s chocolate plates in the supermarkets.










Eco/Bio Shop Supermarket

2015 - 2017 Coffee Bar


Convenience Store

Candy Shop Uppsala Stockholm



Fairtrade Store

Vending Machine



Hotel Coffee Bar


Figure 16 Place strategy


Retailer: • Hotels, Hostels, B&B • Coffee Bars (eg. Wayne’s coffee, Espresso House, Bonor och blad) • Bakeries (eg. Backerei)

Conclusion place


To n

To n



Place Strategy | Afterwards for chocolate plates

In compliance with the above consideration of place strategy, we suggest two different directions to promote Tony’s products. One is to sell chocolate bars and Tiny Tony’s in bio/eco shops, fairtrade stores, coffee bars, candy shops and vending machines by short indirect distribution channel which is transferring products from producer to Tony’s wholesalers and to retailers. Another is to sell chocolate plates in supermarkets by long indirect distribution channel which is transferring products from producer to Tony’s wholesalers to food wholesalers and to retailers. With the sales and distribution support, Tony’s will build a positive brand image in consumers’ mind in the future.


price Introduction Price In this chapter we explain how our strategy affects the pricing of the new product. By comparing the new product to competitors and asking the Swedes for their opinions on the pricing of the product, combined with Tony’s current pricing strategy, a price for the product will be derived.

Price Strategy The chocolate plates have a lot added value compared to competitive products. This is because the origin of the brand Tony’s came from a vision and not a commercial goal. Therefore the brand, as well as the products are aiming for four things; to be critical, do it the Tony’s way, be entrepreneurial and do everything with a little fun on the way. The new products goal is to spread the fun around but also to make people aware of the main goal of Tony’s and share it. In contrast with competitive products, Tony’s chocolate plates are made with care for quality. The chocolate percentage is way higher compared to other products and the shape of the plates encourage playing and thinking about unequal divisions. Therefore we choose to go on a premium pricing strategy in which the products costs more than competitors without being the most expensive in the store. The strategy will be to start with one price and to keep that price stable over time and in different shops.


(‘Pricing strategies’, 2014) the plates will be packaged of 24 pieces together. The costs of competitors plates vary from 0,05 until 0,15 Euro per plate. Tony’s will extend their Dutch pricing strategy, being a premium priced product which is just below the most expensive ones in its category. This means the chocolate plates will costs €0,13, which will make a package of 24 pieces costs €3,12. In Swedish kroners this will be 28,20kr. In Sweden the prices of food are decently higher compared to the Netherlands (CBS, ‘Voeding in Nederland relatief goedkoop’, 2013), which means it is a decent price to ask for the product. With this price 28,20kr we strive to have a price which is less than the customer should expect from a high quality product (and a little less than the most expensive plates) still acceptable for the customer. This will make the product more attractive. As there are less plates in the package than the competitive products, it will make the product seem less expensive as well. Figure 17 Sweets breakfast segment


Price (Danish Krone)

Amound of cocoa (% milk/dark verion)

amount of plates

costs per plate (Danish kroner)

Euro (per plate)

Euro (per 24 plates)

Galle & Jessen





€ 0,15

€ 3,60

Gron balance





€ 0,10

€ 2,40



26 /47



€ 0,14

€ 3,36






€ 0,09

€ 2,16

First price


9 / 37



€ 0,05

€ 1,20

12 / 68,5


€ 0,13

€ 3,12


Referring to the table of the prices of chocolate plates there is a lot of differentiation. To step into the premium pricing

Table 1 Pricing compared to competitors.


price In table 1 you can see the main competitors of the Danish market. The price, the quality (amount of cocoa), the amount of plates per package and the costs per plate (in Danish Krones) is listet, also with the costs per plates in Euro’s.

Survey To see how the pricing of 28,20kr would be perceived in Sweden, a short survey was sent out. In appendix 1 the

detailed survey can be found. In the table one can see that most people want to pay between 20 and 30 krones for the product. Adding this up to the strategic vision and the competitors the choice for 28,20 kroner is a proper choice. The people who filled in the questionnaire were all Swedish but not our target group, most of them are students. So within our target group the price will probably fit better, since adults, the buyers, have more to spend.

Conclusion Price Looking at Tony’s pricing strategy, competitors and comparing this to the answers of the survey - we came up to a price of 28,20 Kroner (equivalent to 3,12 Euro). This is a premium pricing strategy which fits within Tony’s strategy.

Survey outcomes




Price in Swedish Krones









too inexpensive


want to pay Participants opinion



too expensive

Figure 18 Willingness to pay outcomes survey TONY’S CHOCOLONELY PART 2: LAUNCHING STRATEGY

promotion Introduction Promotion The promotion strategy for Tony’s Flinga will be framed within three values that will link the tactics in a strategic way, which are fun, fair, share. These principles are directly translated from the company’s identity and ensure the consistency in the propositions. By creating the plates, Tony’s sets foot in a new market for the company that is already established in the country engaged. This means that the promotion plan should accentuate in gaining a “share in the ongoing market” (Guiltinan, 1999) stimulating a behavior of trial and repurchase on the consumer. Because usually not much information is required by the buyers to purchase a product in this market, the success of the plates will depend largely on the advertising techniques. Based on this information and in our previous research we decided to launch a promotion plan consisting in two main strategies, and we also propose two additional ones that could support the overall plan.

Contest for children It was determined that the first target segment to approach would be children because of their preference towards sweets compare with adults, and also because children cope better with the fun and playful character of

Tony’s. Those are the reasons that were considered to create the first tactic in the introduction plan. It consists of a drawing contest amongst the population between 5 and 12 years old in this scandinavian country. Everyone has a personal interpretation of the concept of fairness. For Tony’s, it’s about bringing down the slavery practices around the chocolate industry. In the spirit of sharedness, Tony’s wants to get to know the perceptions about being fair among the Swedish population, specially the little ones, to celebrate how this concept has been permeated on the youngest citizens of one of the most equity-aware societies nowadays. The contest also aims to promote the dialogue between parents, children and teachers about the topic. To promote the contest, Tony’s will make use of the package of the current chocolate bars as a temporary promotional channel. The information currently displayed on the inner face of the wrapper will be substituted with information about the contest during a period of 2 months. Additionally, posters will be displayed on the sports clubs and recreational hubs frequented by children, and advertising like banners will be displayed on Tony’s social media pages, as well as the official Swedish website. Also very important is the creation of an educational package that will be made available for teachers through Tony’s website. Things like games and illustrative booklets contained in the package will deal with the topics of slavery, fair trade and Africa in an educational way, so the teachers can include them in their programs and promote Tony’s and the contest in an indirect way. In order to stimulate consumption, participants will be asked to use the code inside of the packages in order to


upload their creations. The resulting drawings will appear on Tony’s website and distributed among the different social media platforms so people can see them and vote. The outcome of this exercise will be a collection of illustrations from which the three most representative ones will be selected and included on the wrapper (either directly printed or as a sticker to save costs and ease the logistics) so the kids, families and friends can see the results. This strategy will help to increase the compatibility with the values and beliefs of the market, a characteristic that will improve the adoption of the product (Guiltinan 1999) by generating awareness and stimulating trial. On the time scale, the contest will be launched and promoted during the first quarter of 2018, the illustrations will be received on the second quarter and the special packages will be distributed on the third quarter of the same year.

Equality & Sharing

Figure 19 Educational package and drawing equality contest.



Establish selective distribution for Tonyʻs bars and Tiny Tonys

Intensive distribution for plates

Generate 30% awareness

+20% awareness




Childrenʻs contest

Seasonal plates




XL plates


Christmas contest

2020 Figure 20 Roadmap



promotion Christmas contest In order to engage the consumer once again in an involving tactic, we decided to launch a second contest, this time open to the population of all ages, to avoid the perception that chocolate plates are only for kids. Here, the participants are invited to create and share with family and friends a special breakfast with the help of the Tony’s chocolate plates, and then share images of the special moments. Social media will be the platform to display such interactive activity (since it is fast and free), and the people can vote for their favorites which will be then printed and included inside of the plates’ package as Christmas decoration accessories (eg. circular card for christmas packages). Because this idea depends on season, the time span will be shorter than in the first contest, and the entire process from promotion to release will happen on the last quarter of 2019.

Additional plans With these strategies, the plan can create enough awareness around the new Tony’s Flinga, and if the opportunity to reinvest on promotion arises, there are some additional tactics we propose to increase the approach to the customers.

offering heart-shaped plates on Saint Valentine’s day, or snowflakes motives around Christmas. Relating this tactic to the strategy in a time line, this will be the second stage after the children’s contest, starting in the middle of the fourth quarter of 2018 and ending in the middle of the second quarter of 2019, where Christmas, Valentines, Easter, Mothers day and other events take place. If this tactic is successful it can be repeated on the upcoming years.

XL plates Working further with the principle of Sharedness, we decided to offer the XL plates as a line extension of the Tony’s Finga. The idea behind it is to create a plate large enough to be shared within a small group of people, satisfying their relish and enable the interaction. The launch of this tactic could be contemplated on the third quarter of the second year since launch, because is the time when children have their summer vacation and families can devote more time to the morning ritual of breakfast. If the product is embraced, its consumption could be extended to other social activities like evening gatherings or birthday parties.

Seasonal plates Each year, the season between Christmas and Mother’s Day is a time with multiple events that invite people to share presents to the ones they care about. This represents an opportunity for Tony’s to add some emotional value to the chocolate plates, by fitting them to each occasion, like


Conclusion Promotion We, as Guiltinan, recognize the importance of starting by targeting an important segment who is “most likely to be attracted to the benefits offered”, that is why we created the contest for the children. Moreover, the involvement of the customers, which is a consequence of both of the contests, can turn them into ambassadors of the brand and specially of their values. As written in the description of the plan, the three principles are guiding the strategies: ‘Fairness’ is actively engaged during the first contest and in the educational package. ‘Fun’ is in every strategy. By presenting to the consumer the possibility to participate on the promotion in a creative way rather than presenting one-way directional promotion that focus only in the communication of the product qualities which does not involve the user in an active way. At last, ‘Sharedness’ is the main topic of the Christmas contest, as well as the driver that brought us to create the XL plate. We also share the power to select the winners of the contests so the people can identify themselves in a better way with the results.


Inspirational source for educational package retrieved from Tony’s JaarFAIRslag 2013 In a primary school in the Netherlands a creative way to share the unequally shaped bar is found. Teacher Carin, the girlfriend of Tony employee Gert, sended us the following e-mail: “In my group [with 7 year old children] philosophy is not a school subject - we just do it. We talk about the rich and poor, sharing and taking care of eachother. The children often think of solutions and insights that move and surprise me. Simon, one of my pupils, knows about Tony’s story of chocolate and how to share chocolate. If I tell them about my boyfriend and the boxes of chocolate he has the children want that I call him. So I call him and yes,


he will bring some chocolate to my class. Once the chocolate is at the school, I explain Tony’s story to all the students. Emiel gets the task to divide the chocolate in 21 pieces. The whole group is standing around him. Emiel needs to divide the pieces to his classmates. While he is doing it I ask him how he does it: “I just put a piece on each table without looking who is sitting there, otherwise I am afraid I cannot handle it.” Not one of the children is complaining, even though there are big differences in size. Philosophy is not a course you need to teach in school, you just have to do it so that the pupils will understand! “


SALES AND MARKET FORECAST Introduction Sales and Market Forecast In this chapter the profitability and financial feasibility of the chocolate plates launch is analysed. Firstly a break-even analysis shows how much units need to be sold to breakeven and evaluates if this is reasonable within the given time. Secondly the cash flow provides more insights per quarter one when the sales are likely to be profitable, it shows a worst, best and most likely scenario. In this chapter all the calculations are in Euro’s in stead of Swedish kroners to understand the amounts easily.

Variables Selling price (SP)

In total the fixed costs will be € 45.000,-. The product developments costs are costs made up front and therefore put in the first quarter in the cash flow. The marketing costs are distributed to set up the contest for children about equality (€ 3.500,-) and the christmas contest (€ 1.500,-). Since the contests require some changes in the packaging development, that budget is also distributed over the two marketing concepts, € 10.000,- for start up and € 5.000,- for each contest.

Variable costs (VC) To calculate the assumed variable costs the table of the cost distribution of their annual year report on bars is used as reference (Figure 21) The only difference is that the taxes are higher in Sweden, so 12% is used. ( Furthermore the division 21% for Tony’s Price devision: Tonyʻs JaarFAIRslag 2013

As advised in the price section the selling price will be 28,20 Kroner which is equivalent to 3,12 Euro’s. Minus 12% of taxes ( will make the selling price for the retailers € 2,75. In the annual year report of 2013 says 51% percent goes to Tony’s & the retailers, no specifications on how they divide sales can be found. Assumed for calculations is that this is 21% for Tony’s and 30% for the retailers. This will make the amount that Tony’s gets payed € 1,92. This amount is used as selling price in the cash flow and break-even analysis

and 30% for the retailers is assumed for the 51% in the table. This will provide a variable costs of € 1,52 per unit.

Plates sold (X) Assumptions are made on how many plates that will be sold. These assumptions are made on a calculation of the swedish population distribution. Figure twenty-two shows the population distribution in Sweden. Our target group for the plates are primary school children who are old enough to convince their parents to buy the plates. This results in an age group of approx. 5-12 years old. The table shows that this is 8,8% of the population. Since there are less children than potential parents (25-52 years old), and the marketing strategy is focused on children at the launch it is reasonable to Proposed devision: Tonyʻs plates. Advised selling price Taxes Price minus taxes

100% 12%

€ 3,12 € 0,37 € 2,75

Retailers Fee Price minus retailers


€ 0,82 € 1,92 (calculation price)

Tony’s Chocolonely Variable costs (VC)


€ 0,40 € 1,52

Fixed costs (FC) The fixed costs consist of packaging development costs (€ 20.000,-), product development costs (€ 20.000,-) and marketing costs (€ 5.000,-) (from case description NPC).

Figure 21 Annual year report percentage devision money & plates money devision.


SALES AND MARKET FORECAST Age distribution in the swedish market age group 0 - 14 15 - 24 25 - 54 55 - 64 65<

% by age 15,40% 12,90% 38,80% 12,40% 20,50%

our market (5 - 12) 8,80% 0,00% 0,00% 0,00% 0,00% 8,80% 5,27%

Buyers (parents 25-52) 0,00% 0,00% 36,12% 0,00% 0,00% parent pair: 36,12% 18,06%

Figure 22 Age distribution in Sweden. assume that only the percentage of children is relevant for the first two years. The average amount of child per mother in sweden is 1.67 (, 2013) so this gives a target group of 5,3 % of the total swedish market. The total population is 9.119.423 people, so we aim at 483.329 buyers. Buyers are families of 3.67 people who will consume per 1 buyer (assuming that everybody in the household consume the product), which represent 1.773,818 consumers in our target group. In the worst case scenario it is only feasible to reach 10 % of the Swedish children and activate 20% of the parents to buy Tony’s Flinga. This would result in 9.666

Worst case Most likely Best case

potential buyers assuming that only 1 box is bought in the first quarter. Later on the Tony Chocolonely is becoming better known in the breakfast segment, resulting in more buyers and the ones who remain buying will buy more than one box per quarter. The worst case assumption is that the 20 % will remain buying and they buy 3.8 box (explained later) per quarter resulting in 7.346 sales. In the second and third quarter there will be an increase of new buyers of 1% of the families resulting in 4.833 sales extra in quarter two and three. Stabilisation will occur in Q4 until the launch of Christmas marketing. The fourth quarter of year two will again reach 1% of the families. Figure 23 below explains the calculations behind the plates sold (X) as explained in the reasoning in the worst case scenario paragraph. The percentages for most likely and best case can be found in this table. Most likely will buyers in average use 1 plates a day, since not the whole family will eat it every day, which in sum is 31 plates a month and 91,5 plates per quarter. Divided by 24 (amount of plates in a package) is approx. 3.8 package per quarter.

Breakeven analysis Selling price SP Variable costs VC fixed costs FC

€ 1,92 € 1,52 € 45.000,00

Breakeven units X Breakeven revenue

111.496 € 214.285,71 Figure 24 Breakeven analysis

Break even analysis The break even analysis shows us that Tony’s needs to sell 111.496 units to break even and the break even revenue is € 214.286. The amount of 111.496 units is realistic within a time span of half a year based on the most likely sales scenario explained in the plates sold (X) section. Even in the worst case scenario in Q1 of the second year it is feasible to break even.

Targeted buyers


Activate Q1

Remain buy


Increase Q2 & Q3

Remain buy Q2 & Q3 Buy




Increase Y2Q4


100% 483329

10% 48333

20% 9667


20% 1933

3.8 box 7347

3% 14500

20% 2900

3.8 box 11020




3% 14500


100% 483329

20% 96666

25% 24166


30% 7250

3.8 box 27550

6% 29000

30% 8700

3.8 box 33060




6% 29000


100% 483329

30% 144999

30% 43500


40% 17400

3.8 box 66119

9% 43500

40% 17400

3.8 box 66119




9% 43500


Figure 23 Plates sold (X)





SALES AND MARKET FORECAST Cashflow Conclusion Sales and Market forecast

The three cashflows provide insights on how the amount of plates sold will influence the amount of money earned. In the best, worst and most likely scenario eventually the release will be profitable. Nevertheless it is not likely to become a big source of income in the first two years since it is firstly targeting children. Later on sales might spread over more age layers and increase. Important to keep in mind is that the core purpose of the release of this product is preparing the market for sprinkles, therefore one should not only measure in profit but also in increased values in brand awareness and product portfolio expansion.

This chapter discussed the financial feasibility of the launch of the chocolate plates Flinga. A break even analysis showed that it is likely to break even after two months. The cashflows provided insights on in which months Tonyâ&#x20AC;&#x2122;s need to have some extra cash to support the launch of plates. Overall the launch of plates seems profitable, but not a big source of income. Nevertheless the advice is to start launching the plates since it serves more purposes than only gaining money, like portfolio expansion and preparing the market for sprinkles.



Conclusion & REFERENCES Conclusion Tony’s is on his way to make a move to the Swedish market. With the strategic plan, explained in four P’s and the sales and market forecast we have presented in this report, Tony Chocolonely will be able to gain a place into the Swedish breakfast market. We are proud to present our proposal for the chocolate plates Flinga wich hopefully will create the opportunity to launch sprinkles in the end. This will expand Tony’s vision from the Dutch market to the Swedish market which will be a step forward into improving the chocolate industry and making chocolate-eating legal again. With this vision Tony’s will be able to grow even further and in the end to spread the whole world with their easy-adoptable world improving vision in a fun way!


Conclusion & REFERENCES References Articles Bergen, M. and Peteraf, M. (2002). Competitor identification and competitor analysis: a broad-based managerial approach. Managerial and Decision Economics, 23(4-5), pp.157--169. Beverland, M. B., Napoli, J., & Farrelly, F. (2010). Can All Brands Innovate in the Same Way? A Typology of Brand Position and Innovation Effort*. Journal of Product Innovation Management, 27(1), 33-48. Clayton M. Christense, Scott D. Anthony, Gerald Berstell and Denise Nitterhouse. (2007) Finding the right job for your project. Guiltinan, J. P. (1999). Launch strategy, launch tactics, and demand outcomes. Journal of Product Innovation Management, 16(6), 509-529. Lehmann, D. and Winer, R. (2005). Product management. 1st ed. Chicago: Irwin. Porter, M. E. (1996). What is strategy?. Published November. Williamson, C. (2012). Back to the Basics: Business 101: A Motivated by the Minute Program. 1st ed. CreateSpace Independent Publishing Platform, p.CH 15.

Reports Report From beans to sprinkles, part 1: analysis, Launch in Sweden 2015, may 2014.

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Marketing teacher, Pricing strategies, published on the 8th of May 2014;, (2014). Pressbyrån. Retrieved 9 June 2014, (2014). Profilkilder och presentreklam sturker dina kundrelationer. Retrieved 9 june 2014 http:// Skatteverket, statistics, retrieved may 2014 Superbest, Pålægschokolade & Smørbart, retrieved may 2014; paalaegschokolade-smoerbart/1/alle/sortering-standard, (2014). Types of Distribution: Intensive, Selective and Exclusive Distribution. Retrieved 9 June 2014 types-of-distribution-intensive-selective-and-exclusivedistribution/5780/, (2014). Caramella. Retrieved 9 June 2014 http://, (2014). House of Candy. Retrieved 9 june 2014, (2014). NK Konfektyr. Retrieved 9 june 2014 http://

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Annual year report Tony’s 2013 Kotimaisten kielten keskus, (2014). Frukost i allsköns Assignment description NPC 2014



From bean to sprinkle  
From bean to sprinkle  

New product commercialization course TU-Delft SPD. Sergio Castellanos Arciniega HuiChun Wu Renske Voorn-Moerman Trine Gedde Loes Wagter