Marketing Portfolio Assignment Part 1 Adnan Mehdi 301091381 PDF

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Running head: MARKETING PORTFOLIO ASSIGNMENT PART 1 1Marketing Portfolio Assignment Part 1 Adnan Mehdi 301091381 Centennial College – Progress Campus MKTG 716 – 001 Marketing Professor Toussaint Xavier & Professor Peter Bannon June 26, 2020.Introduction: The chocolate hazelnut spreads, due t...

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Running head: MARKETING PORTFOLIO ASSIGNMENT PART 1

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Marketing Portfolio Assignment Part 1 Adnan Mehdi 301091381 Centennial College – Progress Campus MKTG 716 – 001 Marketing Professor Toussaint Xavier & Professor Peter Bannon June 26, 2020.

MARKETING PORTFOLIO ASSIGNMENT PART 1

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Introduction: The chocolate hazelnut spreads, due to their high palatability, have replaced the commonly used jam, marmalade and butter as the most popular breakfast spread. It has become an integral part of every breakfast. Kirkland Hazelnut Spread is one such product sold by Costco wholesale under their private label brand Kirkland. Internal Data Sources: Sales and revenue: Having being around for more than two decades (Kirkland, n.d.) and with Costco Membership plans in place Kirkland Hazelnut Spread enjoys a good customer loyalty. Kirkland Hazelnut spread is the house version for Costco wholesale and competes with other well-known brands. With the focus towards offering the members with quality products and competitive price the company has experienced an increase in Net Sales by 8% as highlighted in the Fiscal year ending in September 2019. The Kirkland labelled product itself contributed to Comparable Sales Increase by 2% in Canada only. Market Share: The chocolate hazel nut spread is reported to experience a revenue growth of 0.61% in 2021 and Kirkland Products contribute nearly 25% of Costco Sales. The Customer Member renewal rate stands at 91% in Canada which contributes to increased consumption of staple breakfast spread as it complements to having pancakes and waffles, which are the most popular breakfast items in North America households. Brand Reputation: The Kirkland brand is valued at US 75 Billion (Business Insider, 2019). Consumers have a high quality of brand association over Kirkland private label items which includes Hazelnut spread. The packaging of the Hazelnut spread is identical to other well-known brands. Brand Quality: The Kirkland Signature brand emphases quality above all else and they try to meet the quality that either meets or exceeds leading brands. Hazelnut Spread quality is ensured beyond the packaging where they focus on the environment the product is created such as the quality of Hazelnut sourced, the production factories where they are produced & the warehouse where product is stored (Kirkland Signature, n.d).

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External Trends: Socio Cultural Trends: Family Consumption Demand: Breakfast remains one of the important meals for the day and Families with young children is seeing transformation. Making breakfast with ease is experiencing an upward moving trend. The consumption of chocolate spreads has significantly increased mostly due to hectic schedules for the working parents and also to save time from breakfast for dedicating it to the daily commute (Hartman, 2016). Positive: The likeness for chocolate across all age group also is affecting positively on sales and demand for chocolate spreads like Kirkland Hazelnut Chocolate Spread. Negative: The Parents may at some point would look at the Health Benefits over the price or quality. Importance of Quality Product: Consumers usually have repeat purchase of products that satisfy them with quality and price. Customer satisfaction remains pivotal on purchase decision when compared across quality and price. The Chocolate Hazelnut spread remains a loved product across all age group globally and the demand is expected to grow at a CAGR of 3.1% from 2019 to 2025 (Grand View Research, 2019). Positive: Costco Customer Loyalty of Kirkland Products rides on Quality and with their mission to offer the best at low price consumers shall be inclined to purchase more of such quality products. Negative: Quality may not be the standalone determinant if there are more Product availability.

Social Trends: Consumers find chocolate along with Nut-based spreads to be more preferred choice for consumption, owing to the mouthfeel from normal spreads, etc. In North America especially due to peanut allergies chocolate base spreads are considered more acceptable breakfast spread. Positive: Kirkland Hazelnut Spreads have a loyal consumer base due to its quality and this social trend shall only help to penetrate more in this share of the industry with increased sales. Negative: Nut allergies remain a challenge which may impact the consumer behavior.

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Economic Trend: Consumer Savings & Disposable Income: a widespread decrease in disposable income leads to an increase in the overall acceptability of good quality products at low prices. In Canada consumer saving has drastically decreased to 5% (Credit Canada, 2019). Positive: Consumers would focus on Products like Kirkland Hazelnut Spread as one that ensures the quality but does not impact the purchasing power. Negative: With changes in income level some consumers may prioritize on their purchasing habits over Hazelnut Spread to other substitutes.

SWOT Analysis:

Weaknesses (W)

Strengths (S) 1. Trusted & Reputed Brand

1. Calorie count may impact consumption

2. Customer Loyalty 3. Widespread Presence

2. Marketed as a Spread mostly for Breakfast and limits the larger usage Threats (T)

Opportunities (O) 1. Addition of more flavors 2. Product Innovation Possibility 3. More smaller packaging for

1. Increasing Health consciousness 2. Similar Product availability and launch in future days.

easy use Competitors:

The breakfast spread industry has many firms competing. The Market for such item is very appealing and new market entrants are always there. A vast range of brands produce similar item; however, Kirkland Hazelnut Spread has competition from Nutella, Great Value, JIF & Hershey’s. Kirkland

Nutella

Great Value JIF

Hershey’s

MARKETING PORTFOLIO ASSIGNMENT PART 1 Hazelnut

Spread

Spread Price

5 (Chocolate Cheesecake

1kg, 2-pack

725 g x 2

725 mL

Spread) 13-Ounce

13 Oz 2 pack

for $ 11.99

for $ 10.97

For $4.17

3 pack for

for $5.98

$8.48

Product

- Hazelnut

- Sugar

Sugar

Sugar,

Sugar

spread

- palm oil

Hazelnut

Vegetable Oils

Vegetable Oil

- With cocoa

- hazelnuts

Modified

(Canola and

Gluten Free

- Palm-oil-

- cocoa

palm oil

Palm),

Non Fat Milk

free

solids -

Canola Oil

Hazelnuts,

Palm Oil

milk

Whey

Cocoa

powder

Powder

Processed with Alkali Natural and Artificial

Promotio

Provides price

Sales

Rollbacks

Flavors Relies on

Pack Size

n

that are

Promotion

Coupon

Retail outlets

Promotions

competitive

through

Promotions

Video

TV

and also

discounts

Marketing

Advertisements

offers

Gives

Membership

Nutella

benefits

Club

Available only

Available in

association Place

Recognized to

Globally

Recognized

be present at

Recognized

to be present in American

North America,

Costco

at Walmart

South Asia

locations

Outlets.

Market

MARKETING PORTFOLIO ASSIGNMENT PART 1

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Unique Selling Difference: Kirkland Products enjoy customer loyalty. It’s unique selling difference would be that consumers receive more of good quality product at low price. It is also internationally recognized as a Costco private label product. The Kirkland Hazelnut spread has been introduced in 2018 and ever since has been a wellaccepted product across consumers especially in North America.

Global Citizenship & Equity (GC & E) As mentioned in the Kirkland Signature Sustainability: 

Kirkland Cocoa/Coffee Beans are Fair Trade Certified



Kirkland focus on sourcing the beans from Farmers where they focus on Farmer’s Training, Education, Housing & Healthcare.



Suppliers of Kirkland Brand are contractually required to comply with Product Safety Laws.

Costco Wholesale the Parent of Kirkland Brand also commit to the following: 

Costco is a member of the Roundtable on Sustainable Palm Oil (RSPO) and through this membership they are committed to ensure that the palm oil contained in Kirkland Signature™ products is sourced responsibly and sustainably.



Costco has invested over $4 million for honey bee research with Project Apis as it’s commitment to sustainability and to ensure sustainable food supply.



Costco appointed a Sustainability Director since 2015 and whatever cost saving’s they generate those benefits are passed onto Costco members.

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Reference Costco Wholesale., (2019). Annual Report. Retrieved from https://investor.costco.com/static-

files/05c62fe6-6c09-4e16-8d8b-5e456e5a0f7e

Costco Wholesale. (2020). Environmental Impacts and Land Stewardship. Retrieved from https://www.costco.com/sustainability-environment.html Costco Wholesale. (2020). Kirkland Signature. Retrieved from https://www.costco.ca/kirkland-signature.html Grand View Research. (2019). Spreads Market Size, Share & Trends Analysis Report By Product

Type (Fruit Spreads, Butter/Cheese), By Distribution Channel (Supermarket &

Hypermarket, Online), By Region, And Segment Forecasts, 2019 – 2025. Retrieved from https://www.grandviewresearch.com/industry-analysis/spreads-market

Hanbury, Mary., & Green, Dennis., (2019). Costco's Kirkland brand has become a secret weapon worth as much as $75 billion. Retrieved from https://www.businessinsider.com/costco-kirkland-brand-drives-growth-2019 Hartman, (19 April, 2016). EVOLVING TREND IN EATING OCCASIONS: “ALL BY MYSELF”.

Retrieved from https://www.hartman-group.com/hartbeat/646/evolving-trend-in-

eating- occasions-all-by-myselfMarket Insider. (2019). Worldwide Hazelnut Market Analysis & Projections (2019-2024): In

Terms of Consumption, Europe is Expected to Register the Highest CAGR, at 7.6%. Retrieved from https://markets.businessinsider.com/news/stocks/worldwide-hazelnutmarket-analysis-projections-2019-2024-in-terms-of-consumption-europe-is-expected-toregister-the-highest-cagr-at-7-6-1028346468

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Molina, Adriana., (2019). Credit Canada. How Much Money You Should Spend on Monthly you-

Expenses. Retrieved from https://www.creditcanada.com/blog/how-much-money-

should-spend-on-monthly-expenses

Statista. (2020). Consumer Market Outlook. Retrieved from https://www.statista.com/outlook/40090300/108/spreads/canada

Statista. (2020). Food Report 2019 - Breakfast Products. Retrieved from https://www.statista.com/study/48834/food-report-breakfast-products/

Transparency Market Research. (2020). Chocolate Hazelnut Spread Market - Global Industry

Analysis, Size, Share, Growth, Trends and Forecast 2017 – 2025. Retrieved from

https://www.transparencymarketresearch.com/chocolate-hazelnut-spread-market.html

The Insight Partners. (2020). Chocolate Spread Market Forecast to 2027 - Covid-19 Impact and

Global Analysis - by Type (Organic, Conventional); Packaging Type (Bottles,

Pouches,

Cups, Others); Distribution Channel (Hypermarkets or Supermarkets,

Convenience Stores, Online Retail, Others) and Geography. Retrieved from https://www.theinsightpartners.com/reports/chocolate-spread-market

Yaddaw, S. (2018, June 20). Costco and Project Apis m. - Investing in Tommorow's Bee Scientists. [Blog Post]. Retrieved from https://www.projectapism.org/project-apis-mblog/costco-

and-project-apis-m-investing-in-tommorows-bee-scientists...