I N T E R N A T I O N A L M A R K E T I N G M A Y 2 0 1 1 I N T E R N A T I O N A L M A R K E T I N G M A Y 2 0 1 1 E M E L I E W E N D E L A L L Y S O N D I A S R E B E C K A G R I M S B E R G A N N A K A T H A R I N A G E O R G E E M E L I E W E N D E L A L L Y S O N D I A S R E B E C K A G R I M S B E R G A N N A K A T H A R I N A G E O R G E How to introduce pick & mix candy in Germany – International Marketing Report How to introduce pick & mix candy in Germany – International Marketing Report Executive Summary
Candyking is the biggest retailer of pick & mix candy in the world and since pick & mix candy. Candyking’s basic idea is to let the consumer put together his own candy bag according to need, occasion and taste. Their assortment is of the highest quality and contains select favorites from the different suppliers. Candyking is a very strong brand so they can offer grocery retailers, amusement parks, service stations and cinemas a package solution. Candyking’s founder, Christer Forsman, is Swedish and he came up with the idea to try manual candy sales in 1980-1981.
The sales went really well and in 1984 the pick & mix candy sales started in a store in the Swedish capital, Stockholm. Since the sales went so well in Sweden and also later in England, Norway and Finland we would like to trade this product with Germany though it’s the second country, after Sweden, where you eat the most candy. Despite the fact that the German government puts a strong emphasis on the consumer’s protection and the numerous campaigns of fitness and health programs of magazines and also fitness companies, the German sweets consumption is very high and still rising.
No matter which family constellation, social group or nationality the different people belong to, they all love sweets. Consumption habits do not differ among the various consumption opportunities, i. e. the German population consumes sweets in families, in groups, alone in front of the PC, at home, outdoors, etc. As a consequence, the business opportunities for any kinds of sweets are immense within the German market as long as the European and German requirements are fulfilled and as long as the expanding companies keep the competition in mind.
Table of Contents Preface3 Introduction4 Part I. Cultural Analysis6 1. 1 Cultural analysis of Germany6 1:1:1 Relevant history6 1:1:2 Geographical setting7 1:1:3 Social institutions7 Aesthetics9 1:1:4 Living conditions9 Diet and nutrition9 Social security with reference to Health Care9 Part IV. Preliminary Marketing Plan11 2:1 The marketing plan11 2:1:1 Marketing objectives11 2:1:2 Product adaption or modification11 2:1:3 Promotion mix13 2:1:4 Distribution: From origin to destination17 Port selection17 :1:5 Channels of distribution18 Retailers18 Warehousing19 2:1:6 Price determination20 Cost of the shipment of goods20 Candyking’s gross margins20 Retail price21 Time draft22 Appendix I – Packaging25 Preface Pick & mix candy is candy that is sold as price per kilogram and you choose your own bag of candy from big walls in for example the supermarkets. The advantage of pick & mix candy is that it gives the consumer the freedom of choice, to select their personal favorite candy and mix them freely.
The disadvantage of the large selection and the big bags is though that the consumer more easily purchase larger quantities than you would otherwise notice. Swedes eat the most pick & mix candy in the world. This type of candy is also common in Finland, Norway and England. Young people and women between 25 and 60 years old eat the most candy. In Sweden they eat more than 18 kilograms candy per person and per year. For the stores the pick & mix candy has become an important bait to lure the customers into their store.
Competition is hard and you need the best price and supply to attract the price-consciousness customers. The biggest wholesalers are Karamellkungen and Candy Prince, which are both part of the company Candyking. Introduction In the following paper, we will analyze the ”pick & mix candy” market in Sweden and discuss ways to introduce this product in Germany. In order to precisely define the market analyzed, we will begin with an introduction of the company Candyking, the product to be exported and the country with which we wish to trade, in this case Germany.
The company, Candyking, was founded in 1984 under the name “Karamellgrossisten in Sweden AB”. In 1995 the company changed name to Karamellkungen AB. Since the late 1990s the company has been called Candyking all over the world except in Sweden where the original name Karamellkungen has been kept. In 2008 Accent Equity, an investment fund focused on unlisted small and medium sized companies in the Nordic countries, bought the company (Candyking, 2011). Candyking’s basic idea is to let the consumer put together his own candy bag according to need, occasion and taste.
Their assortment is of the highest quality and contains select favorites from the different suppliers. Candyking is a very strong brand so they can offer grocery retailers, amusement parks, service stations and cinemas a package solution. The package solution includes marketing activities, displays, sales support and service. Candyking is represented in more than 7,000 stores and cinemas and have currently 800 employees and sales of €150 million (Candyking, 2011). ”Taste sensations based on freedom of choice. ” ”Taste sensations based on freedom of choice. ”
The product, pick & mix candy has been available in one form or another for many years in candy stores and kiosks. Candyking established, in the mid-1980s, a pick & mix candy concept for the grocery-retailing sector. During the last 20 years of Candyking’s existence the percentage of pix & mix candy sales have increased from a few per cent of total candy consumption till over 30 per cent in some markets. Candyking’s focus is, and has always been to offer retailers a manageable concept, which is profitable, and to offer the consumers a way to purchase all their favorite candy.
Their vision is to be the leading pick & mix candy concept in Northern Europe and their mission is “taste sensations based on the freedom of choice. ” The company’s business concept is to offer consumers the opportunity to select their favorite candies for enjoyable moments and our customers a profitable, manageable concept. Candyking is considered the best brand of pick & mix candy on the established markets (Candyking, 2011). Candyking’s founder, Christer Forsman, is Swedish and he came up with the idea to try manual candy sales in 1980-1981. The sales went really well and n 1984 the pick & mix candy sales started in a store in the Swedish capital, Stockholm. Since the sales went so well in Sweden we would like to trade this product with Germany though it’s the second country, after Sweden, where you eat the most candy (Candyking, 2011). Part I. Cultural Analysis 1. 1 Cultural analysis of Germany * 1:1:1 Relevant history German sweets are all known over the world for their quality and for their uniqueness. Germany is known for their gummy bears, marzipan, mozartkugeln and krapfen. According to Leaf Finland an average German eats 15 kilos of candy each year.
It is the third most in the world, close behind Sweden and the UK. That is almost as much as the average EU citizen eats (Kostdoktorn, 2011). One of Germanys most famous candy brands is Haribo. Haribo was founded by Hans Riegel in Bonn district Kessenich in 1920, where the head office still is. Two years later he created the Gold Berries named Tanzbaren. Haribo quickly grew into a part of leading candy manufacturers in the interwar period. 1925 they started producing licorice products. Today it manufactures a wide range of fruit gum, sweets and licorice (Germanfoods. org, 2011).
Due to the fact that bars of chocolate as well as cookies have even higher consumption rates in Germany than fruit gum (Magazin Deutschland, 2011) it is essential to also name three other brands / companies whose history is very important regarding the German sweets market: Milka (Kraft Foods Deutschland GmbH), Ferrero Deutschland GmbH and the Bahlsen GmbH & Co. KG (Germanfoods. org, 2011). Milka is one of the most favorable chocolate brands for the German consumers. The brand exists since 1901 and stands for quality. The brand is expanding its product line continuously.
Recently Milka introduced Milka cookies in the German sweets market (Milka, 2011). Ferrero offers a very wide product range. Starting with the creation of Nutella, they thereupon produced pralines, chocolate bars such as Kinderriegel and a lot more – even products without chocolate. With their diversity of products they generate a high part of the total yearly German sweet industry turnover. Both Milka and Ferrero distribute their products across a diversity of channels. Bahlsen is very well known for its biscuits and cookies and a preferred brand of the German consumers.
The high quality products capture a huge part of the shelf space in German supermarkets (Ferrero, 2011). * 1:1:2 Geographical setting Germany is located in Central Europe, comprises 16 states and covers an area of 357,104 km?. In the north, the country is bordered by the North Sea, the Baltic Sea and Denmark; in the east by Poland and the Czech Republic. In the south it is bordered by Austria as well as Switzerland and in the west by France, Luxembourg, Belgium and the Netherlands. Germany has a temperate seasonal climate with generally rather mild winters, relatively cool summer seasons and frequent weather changes (Skolarbeten. nu, 2010). 1:1:3 Social institutions Family The family constellations in Germany are changing. Besides the fact that the most common family-type is still the two-children, trends are coming up more and more. A quarter of all families already belong to an alternative form of the “typical” family. The emancipation of women as well as the demographic changes and increasing immigration have a strong impact on the current and future German family constellations. By now, the number of patchwork-families, single households, flat shares, bi national marriages as well as long-distance relationships or homosexual partnerships is increasing significantly.
In addition, the strict parental roles of the past concerning men and women do no longer exist in plenty of families (Skolarbeten. nu, 2010). Families, in the broader sense, i. e. including each form of constellation, are still very important to the inhabitants of Germany. 72 percent of the 12- to 25-year-olds is of the opinion that a family is essential to be happy. Family ties are strong, even between different generations. In comparison with Sweden, the Germans have a different way of looking at their parents. Grandmothers and grandfathers are more often iving with their children and taking care of their grandchildren in a different way than in Sweden (Facts about Germany, 2011). Education Education has an important role within the German republic. The government puts a strong emphasis on this political area and tries to adapt it to internationally common systems and standards. The educational system is structured as follows: Primary education (years 6-12), secondary education (years 12-16). Kids which are able to move on visit higher education schools until the age of 18/19 and get their Abitur or Fachabitur which allows them to go to a university.
Besides the secondary schools, there are also comprehensive schools where all pupils are mixed on one campus. This is often seen critically: On the one hand, secondary schools usually have a better reputation. On the other hand, comprehensive schools provide a gathering of pupils from all different parts: Hauptschule, Realschule and Gymnasium which can cultivate the children’s sense for a society of different social classes. No matter to which school the children go to – companionship is always essential for them and their personal education (Facts about Germany, 2011). In German schools, health education is not very common.
Due to this fact, school cafeterias offer a lot of sweets so that the children grow up surrounded by a variety of products – typically “non-healthy” ones. Nevertheless, regular gym classes take place during a child’s entire school time and the goal of more and more “healthy cooking” is set in many full-time schools (Facts about Germany, 2011). Social organizations Despite the fact that the development of PCs and computer games has a strong impact on group behavior in nearly all countries, the World Wide Web also opens the way for new, very different ways of group behavior.
People tend to spend much time in front of their PC – working, surfing or engaging in social networks, online. Nevertheless, this new form of social community most often does not replace the “real” social connections. Nevertheless, the general feeling of social belongingness and the need for social interaction are still essential for people, so for the inhabitants of Germany. The gap between the rich and the poor more and more becomes a critical development of the German society. However, this is a trend, which also fosters the need for social company (Facts about Germany, 2011). * Aesthetics
The trend of immigration and globalization in general affects the cultural aesthetics of the German country. Music, visual arts and performing acts reflect the structural changes and widen the range of common aesthetics within the country (Facts about Germany, 2011). * 1:1:4 Living conditions * Diet and nutrition Statistics show that the yearly consumption rates of corn, fruits, vegetables, fish and fowl are increasing in Germany. Whereas the consumption of alcohol, eggs, meat, adipose and margarine is rather declining. However, the consumption of any kind of sweets and soft drinks rises significantly (DGF, 2008).
The sales of the sweets industry in Germany in 2009 were about 13. 3 Milliards of Euros high (Statista, 2011). The sweets market generated 10 percent of the whole food industry’s turnovers. The highest production and consumption rates could be found for chocolate, followed by chocolate bars, cookies, fruit gum and others. According to a study of the Statista GmbH Hamburg, German men consume 55-grams sweets a day, women 48-grams. In 2010, the average German citizen spent 45. 49€ – just on chocolate. In sum, he spent about 110€ on any kinds of sweets. At the same time, people want to lose weight – the typical dilemma!
For that reason, each magazine includes some new diets, personal fitness programs and recipes for healthy cooking, including the exact calories of each meal (Livestrong. com, 2011). * Social security with reference to Health Care In the European Union and in Germany in particular, strict rules exist in order to protect the consumer and to provide him with as much information as possible (BMELV, 2011). Regular and strict quality checks are mandatory and serve to protect the consumer’s health. Imported products have to meet a variety of requirements, nationally and within the EU.
It has to be obvious from labeling whether a food contains allergens. Moreover, information with regard to a product’s ingredients has to be available as well as nutrition facts. Additionally, there are diverse official quality seals in order to facilitate the consumer’s product selection. All these information has to be comprehensive and obvious to ensure a maximum of consumer protection. In Germany, the Bundesministerium fur Ernahrung, Landwirtschaft und Verbraucherschutz (BMELV) is in charge of this critical task (Civitas, 2005). * Part IV. Preliminary Marketing Plan * 2:1 The marketing plan 2:1:1 Marketing objectives Target Market Candyking can be consumed by all demographics, both young and older people. Our target market is a German household since we have decided to launch our product in Germany. For marketing perspectives we have segmented into two groups: families and the younger generation (ages 12-25). Families buy candy as a leisure activity or after school as a treat and for example working people buy candy to handle a stressful day. Market penetration and coverage Market penetration and coverage will begin by implementing a presence in REWE’s 3,000 German supermarkets.
The next stage will be to expand into cinemas and continue expansion in REWE’s grocery stores. The third and final step will be expansion into Edeka grocery stores and all REWE locations. * 2:1:2 Product adaption or modification AdaptStand-processmodel To clarify the process in the choice of strategy we have chosen to develop an adaption and standardization-process model. None of the adaption and standardization strategies should be used on its own, it’s more about the degree to which strategies should be applied. We use the strategy as a combination between the two different strategies above.
This model shows the different stages that a multinational company such as Candyking must undergo in order to identify the degree of integration required of the marketing mix factors. We have chosen to only use the 4 P:s; product, price, promotion and place. By first make a thorough analyze of the culture in Germany we can decide whether to standardize or adapt our product and after we made that decision we will look at the result and decide which different media we’re going to use. This way we can form our best possible promotion mix to be able to reach our target market. Source: Own construction.
Source: Own construction. Core component Minimal adaption and modification is necessary for the German market. The name will be changed from its original Swedish name, “Karamellkungen”, into a more international name, “Candyking. ” This is also a consideration for a future international expansion. The same types of candy will be sold in Germany, which include chocolate, fudge, toffee, foams, jellies, wine gums, hard boiled candies, liquorice and cables. One adaption will be to include more chocolate choices because Germans enjoy chocolate very much, which we could see during our cultural analyze.
Packaging component Packaging will include take home bags made of four colors: blue, orange, pink and green. Together they form a recognizable, unique, attention grabbing color combination. The bags will include the Candyking figure, which is the logo of the brand and stands out against the colorful bags as a white figure with a crown. The German market will be offered additional sized bags to meet the needs and wants of different consumer habits: Big, Medium, Small and Mini. We will also add cups as alternative to the bags. These will be standard “Pick & Mix” cups- 22oz size – large, printed in blue.
The reason why we will add these cups are because we feel they will match our target group in Germany. | | | Support services component In store installations will be standardized plastic containers to hold the candy. The plastic lids will have lids to keep the candy fresh so the candy can be seen from far away and close up. Each installation will include 20 columns and 5 rows. Therefore, each installation will offer 100 different types of candy. A banner across the top will include the colors of the individual take home bags (blue, pink, orange and green) and include the Candyking logo.
Nutritional information and ingredients will be featured on the outside of each container for each candy type. * 2:1:3 Promotion mix According to Kotler the 4P:s (IfM, 2011) in the marketing mix are controllable and tactical tools that marketers may use in their efforts to affect the market and receive better response (12Manage, 2011). Below is a description of each factor: Our product is the pick & mix candy itself and that will hopefully satisfy a desire or a need. This includes our image, brand, the quality of the candy and design (IfM, 2011).
Compared with other parts of the marketing mix, the product is the factor that is most often retained in identical form. We have chosen to standardize our product though candy is something that everyone knows and that doesn’t really need a presentation. And as we found out in our culture analysis an average German eats approximately 15 kilos of candy every year. Fixed child hardly needs any introduction to the colorful sweets. The stone-age human brain is programmed to be attracted to bright colors to signal; “here is something sweet that is not toxic”.
There are many benefits with standardizing such as economical scale benefits, reduced inventory costs, global accordance, same product experience for the mobile consumer and easier planning and control over the company. We are only going to make some small changes to match our new market, such as adding more chocolate alternatives. Packaging must meet many sales data, to attract attention, to describe product, and to eventually sell it. The package is the buyer’s first encounter with the product and is capable of turning the buyer on or off (IfM, 2011).
When Candyking changed their logotype in 2006 their new corporate identity was required to appeal to adults and children, and to be simple, unique and strong enough to establish the brand as a category leader in an otherwise “unbranded” sector. Candyking was also looking to launch in an international market. Germany has similar consumers as Sweden and therefore we have decided to keep the same design when launching in Germany. We can then keep down costs and prices and build a global brand. The price includes the amount of money taken in payment for the product.
This factor also includes the discount that can be given in connection with promotions, payment periods and credit terms (IfM, 2011). When we set the price for our product in Germany we will consider the market price of substitute products. We also have to consider factors such as environment and competition. After analyzing our new market we have decided to use the same price strategy as in Sweden, which is about 10€ per kilogram. The third factor is place, meaning the company’s space activities that make a product available for the public (IfM, 2011).
We have choice the REWE’s supermarkets as our choice of distribution because we believe it’s the best way for us to reach our consumers and we will use the transportation company DHL. The promotion means activities that communicate the products benefits to the population and that might lead to a buying decision. This may be advertising through various channels; media, campaigns or in stores, personal selling and other publicity (IfM, 2011). There are five components in the promotion: advertising, public relations, sales activities, personal selling and direct marketing (Wikipedia, 2011).
Promotion is very important in the help to stimulate a behavior that moves the consumer’s hierarchy, from awareness to decisions that lead to purchases and loyalty. Advertising efforts will begin before the product is offered in Germany. In order to acquaint customers with the new product, establish a company image, emphasize the quality of the product, stimulate sales, promote consumer awareness and the opening of a new business, a tailored marketing promotional plan will be implemented before, during, and after the opening of Candy Kind in Germany.
Advertising The television advertisement will be scheduled for weekdays at 4:00 to target kids watching after school. To target adults relaxing before they go to bed in the evenings we will also air at 9:30, as well as, Saturday and Sunday mornings at 10:00, 11:00 and 11:30. The television advertisement will directly target and feature a German family: mother, father, daughter and son. They will be seen having a good time picking out their candies at a local grocery retailer. The father will assist his daughter reach the higher placed candies by lifting her up.
The camera will show all the brightly colored, mouth-watering candies. It will demonstrate the family oriented activity of Candyking as well as the process, which involves the customers. The reason why we also chose this type of television advertisement is because of the importance of family in Germany. We want to show the families, that is one of our target groups that pick & mix candy can be a bonding experience for the whole family. In addition a second television advertisement will target younger consumers.
Germany has diverse family constellations beyond the stereotypical fore-mentioned family; therefore a supplementary advertisement is necessary. This advertisement is specific to young workingwomen as they are one of the highest consumers of candy. They will be represented in a flat share situation during the launch of their careers. Both women will be 24 years of age and represent different ethnic backgrounds. The first woman will be sitting on the couch crying with a mountain of tissues next to her. There will include clips of her watching romantic movies such as the Notebook and Casablanca and subsequently crying her eyes out.
It will be made obvious that her boyfriend has just broken up with her. The second woman/flat mate will be seen in the background getting ready for work, making coffee to go, coming home from a long day, and just continuing with her career. She will show concern for the distraught state of her flat mate. The next day the second woman will come home and say to her broken-hearted flat mate, “Here is my little secret to heal a broken heart. ” She will present a bag of Candyking. They will sit on the couch and talk, laugh and share the candy showing another bonding experience.
A clip will show the two girls rushing to leave the apartment together in the morning for work and the first woman handing the second woman a cup of coffee to go. The billboard advertisement will be a large colorful billboard sign featuring the assortments of candies offered. It will be brightly colored and well lit. White text in the corner will read, “Coming Soon. Taste the Sensation-Candyking. ” This will be released one month prior to the arrival of Candyking to raise awareness about the brand to the German demographic.
Since Germans love candy we don’t feel like we have to promote the candy itself much further. Sales promotions Promotions will be offered to stimulate sales. The first two weeks, a dressed up Candyking will distribute free samples in the REWE stores and verbally promote the first month offer, “Buy 1 kilo, get 4 euros off”. We will also have sales promotion 4 times a year: before Valentine? s Day, during Easter, Halloween and Christmas. Personal selling Personal Selling is featured in REWE grocery stores and will take place before and during construction for Candyking kiosks.
It will be in the designated spot for Candyking and it will hold the purpose of raising awareness so when the candy is introduced, people will already know about it. These booths will feature virtual pictures of what the designated space will look like, sample candies, as well as offer get acquainted incentives, to entice customers to return when Candyking is open. This is important to make Candyking stand out in the crowd of all sweets already existing in Germany. We need to show them the benefits of buying pick & mix candy. 2:1:4 Distribution: From origin to destination Port selection We have chosen to export pick & mix candy from Sweden to Germany. Germany has a world-leading export industry and has remained the third largest economy in the world after the USA and Japan. The economy is well developed in the power of the large domestic market and the large layer of medium-sized enterprises. In 2006 the Swedish exports to Germany was 108 billion USD, an increase by around 7 percent comparing with previous year. Germany is Sweden’s most important trading partner and represents 10 percent of exports and nearly 20 percent of imports.
As Europe’s largest market and the world’s fourth largest economy, Germany continues to offer new business opportunities for Swedish companies. The Germans’ demands for high quality along with the good reputation of Scandinavian products make Germany an excellent market. Thanks to free trade and harmonized rules, it is also relatively easy to get started with exporting to Germany, in all cases, existing tariff rules, payments, contracts, etc. In Germany there is an untouched market (pick & mix candy does not exist) that we have chosen to step into because we see big business opportunities.
Mode selection Candyking will use motor carriers. This is flexible, cheaper and makes it easier to maintain timely deliveries. Since a couple of decades ago there is a culture of ordering shipments as late as possible to minimize the need for storage. Once the order is made, the goods shall then be delivered quickly. Today, suppliers use flexibility and speed as a competitive tool, offering frequent deliveries overnight. Trucks have comparative advantages over other modes; to ship goods by truck is simple and flexible.
Governments and the EU are today investing large sums in expanding the capacity of road network leading to reduce traffic on the railways and increased truck traffic. These are the reasons why we will transport our goods on the roads. Packing Candyking has the past year developed a new package to replace the plastic bin with a more environmentally friendly packaging with corrugated cardboard. The packaging is an important feature for most products. It protects the product and is often necessary as an information carrier. Documentation required
Since we are exporting to a country within the European Union (EU) most goods are in free circulation and can be freely moved from the UK to other EU countries without customs controls or charges. There is still some documentation that is required: * Bill of lading- contract between the owner of the goods and the carrier. * Commercial invoice- bill for the goods from the seller to the buyer. There is no standard format for commercial invoice but it must include parties involved in the shipping transaction, the goods being transported, the country of manufacture, and the Harmonized System codes for those goods. Dock receipt and a warehouse receipt – used to transfer accountability when the domestic carrier moves the export item to the port of embarkation and left with the ship line for export. * Export license – a government document that authorizes the export of specific goods in specific quantities to a particular destination. * Insurance certificate – is used to assure the consignee that insurance will cover the loss of or damage to the cargo during transit. 2:1:5 Channels of distribution Candyking buy different sweets from several suppliers such as Kraft Foods, Cloetta, Totte Gott, Astra and Larny Lutti.
We order our goods along with our buffer storage and ordering spot. The deliveries arrive at the headquarters, for example in Sweden it’s Solna. The retailers send their orders to Candyking, which receives the order and then send the goods to the stores. When the stores receive the goods they pay the bill (invoice) to Candyking and then they can sell the sweets in their store. Customers can then buy candy by their choice and mix the different varieties of sweets. Candyking is a wholesale middleman who distributes their candy between their suppliers and their customers, which are the retailers. Retailers In Germany we will pick one big retailer that we? re going to sign a contract with. The store is called REWE. The agreement we will make with them will help us get into a huge and profitable market. REWE is our customer and then they sell the candy to our consumers. This agreement means that all REWE-stores in Germany will sell candy from Candyking. REWE Group sells what the Germans love the most – food and drink. REWE is the third-largest food retailer in Germany (behind METRO AG and Lidl) and one of the largest in Europe overall.
REWE Group operates more than 15,000 stores in some of 15 European countries and about 10,900 in Germany. The store formats include supermarkets (REWE), which we’re going to focus on at first, but also hypermarkets, discount stores, drugstores, DIY stores and consumer electronics stores. REWE supermarkets have 3,000 stores in Germany only. The company was founded in 1927 and REWE is cooperative owned by some 3,000 of its independent retail members. The scale of operation will at first be to get into all the REWE supermarkets, which today have more than 3,000 stores in Germany.
The scale is quite big but Candyking is a well-established company and we have good contacts all over the world and the best suppliers in Europe when it comes to pick & mix candy. Later we hope to be able to increase the scale of operation to other REWE Groups stores and eventually even to cinemas and the Edeka chain in Germany. * Warehousing We are going to store our products the same way we do in the other countries that we are active in. We will build a main warehouse and a head office in Germany, in Bad Hersfeld. Bad Hersfeld is situated in the middle of Germany in the Hersfeld Basin.
In the southwest lie the Vogelsberg Mountains, in the northwest the Knullgebirge and in the northeast the Seulingswal and it has good access to plenty of freeways. Then we will buy the candy from our suppliers in Europe and house the candy in this warehouse and then transport it to REWE supermarkets all over Germany. We will use DHL for both the warehousing and the skipping. DHL is included in the world’s leading logistics group, Deutsche Post, DHL. They offer integrated services and tailored, customized solutions for managing and transporting mail, goods and information. DHL has four business units, each of which has its own management.
Candyking already has a deal with DHL and they have helped build our warehouse in Sweden. Then there are trucks that ship the orders from the warehouse to the stores. 2:1:6 Price determination * Cost of the shipment of goods Since Candyking already buys our candy from different suppliers around Europe the costs won’t be more or less expensive because our warehouse is situated in Germany. If you are selling goods within the European Union, most goods are in free circulation and can be freely moved from our suppliers to Germany without any extra charges. The costs of the shipment of our goods will therefore only be the transportations costs.
Candyking already has an agreement with the transportation company DHL that is an international company, and this agreement will we also use for transportation in Germany. DHL offers both the service of transportation, loading and unloading the goods and building of great warehouses for the goods. DHL provides customized solutions for the entire supply chain, from initial consultancy and design, to the final delivery to our customers. They use a sophisticated model and practical real life experiences to figure out exactly what we need, and how to get people, technology and real estate to work together to achieve this.
Thanks to the deal that already exist between Candyking and DHL we can also get a good deal for launching our product in the new market – Germany. Retail markups and discounts We can offer REWE-supermarkets, our retailers, a very good deal. We offer them the package solution that includes marketing activities, displays, sales support and great service, which makes it possible for them to be profitable. The more they buy from us, the greater the discount will be. * Candyking’s gross margins Gross margin is a good indication of how profitable a company is at the most fundamental level.
Companies with higher gross margins will have more money left over to spend on other business operations, such as research and development or marketing. It can be defined, as the amount of contribution to the business enterprise, after paying for direct-fixed and direct-variable unit costs, required covering overheads and providing a buffer for unknown items. It is a measure of how well each dollar of Candyking’s revenue is utilized to cover the costs of goods sold. INCOME STATEMENT2009-05-01- 2010-04-30 Net 966 490 Cost of goods sold- 681 118 Gross profit 285 372 Gross margin 29,53 %
As you can see above Candy king’s gross margin were 29,53 % between 2009-05-01 and 2010-04-30. * Retail price Our retail price will differ a bit depending on how much our customers order at that time. Minimum for an order is 8 boxes of pick & mix candy. 1 box include between 3-5 kilos of candy depending on the candy type. We will of course offer our customers discounts depending on the size of their purchase. There’s a 3,5 % discount for all orders over 16 boxes, a 7 % discount for all orders over 59 boxes and a massive 10,5 % discount for all orders over 160 boxes. -12 boxes| € 12| 43-48 boxes| € 40| 13-18 boxes| € 17| 49-54 boxes| € 45| 19-24 boxes| € 22| 55-60 boxes| € 50| 25-30 boxes| € 27| 61-161 boxes| € 54| 31-36 boxes| € 31| 161-320 boxes| € 108| 37-42 boxes| € 36| 321-480 boxes| € 174| 2:1:7 Terms of sale Shipping We work with the best transportation company, DHL, and always choose the delivery method that is the fastest, cheapest and safest for each order and of course with the environment in focus. We always strive to give our customers as fast and reliable deliveries as possible. Customer Satisfaction Guarantee
Central to our mission is to provide our customers with good quality at a good price. All our products are tested to meet high quality standards. We call it Customer Satisfaction Guarantee. This means that if one of our customers is not satisfied with our product they are welcome to contact us and we will correct the fault. Payment Terms We will demand payment on invoice within 30 days from our customers. We perform the usual credit checks on all new customers. After the due date will charge interest rate of 2%. If our customers have any complaints they can report this to us within seven days after delivery.
They may return our products only after an agreement with us. If the products are special ordered or customized they may not be returned. 2:1:8 Methods of payment * Time draft The method of payment we will use is time draft. Our invoice will be at a determinable future time, 30 days after presentation (after sight). The purpose of this method is to allow our buyers some time to pay for goods bought. The customer shall pay for the goods within 30 days of the date of the Candyking’s invoice as long as the delivery has taken place and the buyer has received the goods.
If the buyer fails to make any payment on the due date then Candyking will be entitled to a) cancel the contract or suspend any further deliveries to the buyer, b) allocate any payment made as the Candyking sees fit, and c) charge the buyer interest (both before and after any judgment) on the amount unpaid (2 %), until payment is full made. No cash in advance is necessary. Bibliography * Candyking (2011) “Enjoyable moments – on your terms”. Web. 06 May. 2011. http://www. candyking. com/Candyking/templates/Candyking_Page. aspx? id=1592&epslanguage=EN * Candyking (2011) ”A royal history” Web. 6 May. 2011. http://www. candyking. com/Candyking/templates/Candyking_Page. aspx? id=1593&epslanguage=EN * Germanfoods. org (2011) ”Get the facts” Web. 06 May. 2011. http://www. germanfoods. org/consumer/facts/guidetocookies. cfm * Magazin Deutschland (2011) ”Modernes Leben” Web. 06 May. 2011 . http://www. magazin-deutschland. de/de/artikel/artikelansicht/article/modernes-leben. html * Kostdoktorn (2011) ”Ater vi mest godis i varlden? ” Web. 06 May. 2011. http://www. kostdoktorn. se/ater-vi-mest-godis-i-varlden * Milka (2011) ”Marke” Web. 06 May. 2011. http://www. milka. de/milka2/page? iteid=milka2-prd&locale=dede1&PagecRef=1 * Ferrero (2011) ”Unthernehem” Web. 05 May. 2011. http://www. ferrero. de/ferrero2. aspx? pageurl=metanav%2fferrero_weltweit%2fdefault. aspx * Skolarbeten. nu (2010) ”Tyskland” Web. 01 May. 2011. http://skolarbete. nu/skolarbeten/tyskland-3/ * Facts about Germany (2011) ”Families – an important social institution” Web. 25 April. 2011. http://www. tatsachen-ueber-deutschland. de/en/society/main-content-08/families. html * Facts about Germany (2011) ”Education and Research” Web. 26 April. 2011. http://www. tatsachen-ueber-deutschland. e/en/education-and-research. html * Facts about Germany (2011) ”Society” Web. 26 April. 2011. http://www. tatsachen-ueber-deutschland. de/en/education-and-research. html * Facts about Germany (2011) ”Culture and Media” Web. 26 April. 2011. http://www. tatsachen-ueber-deutschland. de/en/culture-and-media. html * Livestrong. com (2011) ”Diet and Nutrition in Germany” Web. 04 May, 2011. http://www. livestrong. com/article/359745-diet-nutrition-in-germany/ * DGF (2008) ” Trends im Lebensmittelverbrauch in Deutschland” Web. 01 May, 2011. http://www. dge. de/modules. php? name=News&file=article&sid=901 Statista (2011) ” Wochentlicher Verzehr von Su? igkeiten und Snacks in Deutschland (in Prozent)” Web. 02 May. 2011. http://de. statista. com/statistik/daten/studie/76884/umfrage/sueigkeiten-snacks%3A-favoriten-der-deutschen/ * BMELV (2011) ”Lebensmittel-Kennzeichnung” Web. 02 May. 2011. http://www. bmelv. de/DE/Ernaehrung/Kennzeichnung/kennzeichnung_node. html * Civitas (2005) ”Institutet for studiet av Det civila samhallet” Web. 05 May. 2011. http://translate. google. se/translate? hl=sv&langpair=en%7Csv&u=http://www. civitas. org. uk/pubs/bb3Germany. php * 12Manage (2011) ”Vad ar marketing mix? Web. 05 May. 2011. http://www. 12manage. com/methods_marketing_mix_sv. html * IfM (2011) ”4Ps of marketing” Web. 01 May. 2011. http://www. ifm. eng. cam. ac. uk/dstools/paradigm/4pmark. html * Wikipedia (2011) ”Promotion” Web. 02 May. 2011. http://en. wikipedia. org/wiki/Promotion_(marketing) Appendix I – Products Top 20 Milk chocolate fudgies Milk chocolate fudgies Crispy bite Crispy bite Spinning tops Spinning tops Fizzy dummies Fizzy dummies Duo fudge Duo fudge Snowies Snowies Peaches Peaches Giant fizzy cola bottles Giant fizzy cola bottles Milk shake bottles Milk shake bottles
Fizzy bubble gums Fizzy bubble gums Strawberry bonbon Strawberry bonbon Fizzy cola bottles Fizzy cola bottles Mini strawberry cables Mini strawberry cables Sugar coasted strawberry Sugar coasted strawberry Red Metre Red Metre Appendix II – Billboards Appendix III – Packaging Colorful paper bags in sized small, medium and large. Colorful paper bags in sized small, medium and large. These are standard “Pick & Mix” cups – 22oz size – large, printed in Blue, Pink, Orange and Pink. These are standard “Pick & Mix” cups – 22oz size – large, printed in Blue, Pink, Orange and Pink.