Introducing Smartbox in UK


Published on

Market Survey for the introduction of a Smartbox French Cookery Lessons in UK Research Report IFI - Rouen Business School 2009

1 Comment
  • Bonjour Colin,

    J'aimerai beaucoup pouvoir imprimer ton plan mais je n'yarrive pas . Cmt puis je faire ?

    Merci d'avance
    Ambre Maillet
    IFI 2
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Introducing Smartbox in UK

  1. 1. Colin GODEFROY 15th June 2009 MARKET SURVEY IFI2 2008-2009 EXPORTATION OF THE SMARTBOX FRENCH COOKERY LESSONS IN UK BSc in International Business – IFI Rouen Business School 3, rue du Maréchal Juin 76 130 Mont Saint Aignan
  3. 3. 1. THE CURRENT POSITIONING OF SMARTBOX 1.1 THE SMART&CO COMPANY 1.1.1 THE SMART&CO COMPANY BACKGROUND Managed by Pierre-Edouard Stérin, the Smart&co Company was founded in 2000 and has grown exceptionally quick. Having branches all over Europe with its head office in France near Paris, it today counts nearly 500 employees. Smart&co and its Smartbox gifts are specialists in creating even more interesting trips, leisure activities and gifts. In 2007, Smart&co put more than 1.6 million gift boxes on the market in Europe. Since the founding of the group, more than 5 million Europeans have experienced Smart&co. Smartbox products are available in more than 2 500 sales points across Europe. Smart&co began the idea of thematic packages in France. The company conceived and then put Smartbox on the market via new distribution networks and on-line sales. For individuals as well as firms, this new generation of gift vouchers allows its holder to choose between a choice of destinations or activities around a given theme. The success has been considerable. With its 62 French Smartbox, Smart&co is the leader in its field. Awarded the 2004 Oscar for Innovation, Smart&co continues to find new ways of bringing people together for leisure pursuits. 1.1.2 SMART&CO GO INTERNATIONAL Smart&co is broadening its horizons and internationalising the concept of Smartbox. Present in France, Belgium & The Netherlands, Great Britain & Ireland, Spain, Switzerland, Portugal, Italy, Germany, Sweden and Denmark, Smart&co is today the European leader in thematic “gift boxes”. It is also present in the United States, in Canada, Japan and soon in Brazil. Page 1
  4. 4. 1.1.3 THE PHILOSOPHY OF THE SMARTBOX Originality: Each gift box is a unique creation developed in close collaboration with our partners. So you can be sure to offer an original and exclusive experience. Quality: We guarantee a high quality level for all our activities thanks to the selection of the most reliable partners. Our partners are committed to fully respecting the Smartbox Quality Chart. We regularly run quality tests to ensure that this is always the case. Thanks to this, 95% of the recipients who enjoyed a Smartbox experience have claimed to be satisfied or very satisfied. The choice: There are more than 750 activities and escapes offered via 10 different themes, in the 4 genres namely: Well-being, Sport, Escapes and Culinary Treats. With Smartbox, you can continuously offer the cream of the leisure industry to your relatives, friends, employees or clients. The price: Each Smartbox is all-inclusive: you won’t have anything else to pay on site (but your travel)! 1.2 THE NEW SMARTBOX TO BE INTRODUCED IN UK 1.2.1 THE IDEA/CONCEPT OF THE SMARTBOX COOKERY LESSONS Can't tell your tubers from your trombones, your courgettes from your croquettes, your zucchini from you linguine? Does every meal you prepare seem your last supper? Reach for the Cookery Lessons Smartbox with its expansive selection of cookery experiences ranging from kneading to filleting, baking and sautéing. The delicious ingredients and spectacular settings are sure to placate even the most particular palate. Be whisked away to the world's finest cuisine with our friendly, knowledgeable gourmands, whatever your level of ability. Whether you offer this unforgettable feast to a friend, or indulge yourself with the Cookery Lessons Smartbox, rest assured your creations will be nothing less than mouth-watering. Page 2
  5. 5. 1.2.2 THE INNOVATION OF THE SMARTBOX FRENCH COOKERY LESSONS Contrary to the classic Smartbox Cookery Lessons, The Smartbox French Cookery Lessons will focus on the French cuisine split in several themes that aim to spread the typical French way of life and to share with the English people the pleasure of a well-prepared French meal. This Smartbox cover a wide range of the French cooking traditions. By buying our gift box, our customers can learn how to cook the most famous French recipes. There are several themes divided between some geographical areas (such as Alpine courses or cuisine of Provence…) and seasons (recipes specially conceived for being prepared during summer, autumn, or winter). Some lessons will be focused as well on some French specialities: for instance, customers will be able to choose between classes concentrated on the different way to cook foie gras or macarons. The guidebook included in the box also give a full range of cooking advices and teach the reader about the French way of life: how to behave when you are invited to dinner and more generally good manners that you need to know when you are travelling to France. In addition to smart advices on how to prepare the recipes and what kind of utensils you need, our goal is to give your way of behaving a little taste of France and to share with our customers our pride of being French. The French Cuisine is one of the most important asset of the French Culture abroad and that is why this Smartbox will have a particularly great visibility in the UK. We make the most of the positive image that France convey abroad: a historical country that remains authentic. The gentlemanism, the romanticism, the image of Paris abroad, our history and our cooking traditions are our most significant assets and we are determined to take profit of them to ensure the success of this brand new Smartbox. 1.2.3 THE LOCATION OF THE LESSONS All of the cookery lessons will be dispensed in the celebrity chef Jamie Oliver’s restaurant, Fifteen, situated in Central London nearby the Old Street tube station. Jamie Oliver is a well-known chef in England. The opportunity to establish a partnership with him would be a great chance for Smart&co and its Smartbox to gain a huge visibility on the market of the experience day out. The classes will be done in his restaurant because it contributes creating an important image of professionalism while benefiting of the awareness of the chef. The strategy of celebrity endorsement for this Smartbox is explained in part 3.5 Page 18. Page 3
  6. 6. 1.2.4 WHAT WILL BE TAUGHT IN THE SMARTBOX FRENCH COOKERY LESSONS? All courses are hands-on and designed to be inspirational, great fun, satisfying, relaxing and informative. The customer will leave more confident, having been shown new techniques and tips. Included in the course are ingredients, full tuition, cook tips and techniques, drinks on arrival, course folder with recipes (included in the guidebook) and of course will include food throughout the experience! No rocket science with this course, it's varied and fun and very French! Below is a sample menu of what the customer is likely to learn to cook*: Home made bread including the typical Baguettes Cassoulet The Bouillabaisse with Rouille Coq Au Vin Gigot D'Agneau a l'ail and aux Flageolets Gratin Dauphinoises Potatoes French Apple Tart * The menu is likely to change according to the chef and what theme the customer choose. IMPORTANT INFORMATION Location: Central London Length of Session: The lesson lasts about an 3 hours 30 minutes. Two sessions a day: in the morning at 8.30a.m and in the afternoon at 1p.m. Food/Drink included: Tasters are provided throughout the demonstration, plus red and white wine to accompany the samples. The lunch you prepared is then provided after the tour. Guidebook: A course folder with recipes, cook tips and techniques is yours. Age Restriction Information: Min 16 years Health/Disabilities Restriction Information: Any food allergies must be disclosed prior to arrival. 1.2.5 HOW TO USE A SMARTBOX FRENCH COOKERY LESSONS? Choose a cookery class with the help of the guidebook Reserve while checking availabilities directly with the supplier and confirming you hold a Smartbox voucher. You will then asked to provide the first 9 digits of the unique Smartbox code that appears on your voucher. Enjoy your cookery class after presenting the original voucher, duly filled out and signed by to supplier on your arrival. Share your experience with the person who offered you this Smartbox, by using the enclosed thank you postcard. Page 4
  7. 7. 2. THE MARKET OF THE EXPERIENCE DAY OUT IN UK 2.1 TREND: A REVOLUTION IN THE LEISURE INDUSTRY 2.1.1 THE EXPERIENCE ECONOMY The experience days out market is a relatively young one, which has its roots in the emergence of a powerful idea: the ‘experience economy’. This has become an increasingly influential concept used to describe a significant shift taking place within contemporary consumerism. The term was originally coined by US economists James Gilmore and Joseph Pine at the start of the current decade1: ❝ Goods and services are no longer enough. To be successful in today’s increasingly competitive environment, companies must learn to stage experiences for each one of their individual customers. We have entered the Experience Economy, a new economic era in which all businesses must orchestrate memorable events ❞ for their customers that engage them in a personal way. Being, not having With the rise of mass affluence, a growing number of consumers are said to be less satisfied with traditional material acquisition (having) and are beginning to seek personal fulfilment (being). The consequences include the decline of the mass market in many sectors – such as leisure – and the emergence of far more personalised customer needs and niche markets. Smartbox is part of the market of the Experience Day Out. Nowadays, consumers are becoming jaded by material goods and abandoning traditional leisure activities in favour of rare and exciting experiences. Consumers are looking for something deeper, richer and more memorable than simply ‘products and services’. For an industry that sells special-occasion days out, organised around leisure activities, this should be a boom time. User-Generated Content The increasing desire for customisation in the experience days out market fits in well with the concept of control that is key to the popularity of user-generated content. Modern consumers are no longer content to simply accept what companies attempt to sell to them – they want to have their 1 Page 5
  8. 8. say in determining the content of the products and experiences they buy. Some experience days allow participants to create their own content. Consumers are increasingly getting bored of traditional leisure activities in their day-to-day lives – in consequence the development of the experience days out market. While the trend is, to a certain extent, towards customisation, time-poor consumers also tend to want someone to organise their leisure activities for them. Do-It-Yourself experiences without actually having to do-it-yourself. Experience day out operators are in a prime position to move away from simply offering ‘days out’ to become an all-purpose experience provider. 2.1.2 MARKET OF EXPERIENCE DAY OUT IN BRIEF Lower prices driving growth… The experience days out market was worth an estimated £98 million in 2006 2. Although it remains a relatively small niche element in both the leisure and gift industries, it appears set on a path of steady future growth. The value of the sector grew by an estimated 44% between 2001 and 2006 driven by greater retail exposure on the high street, the continuing growth of Internet shopping and a steady decline in the average price of experiences. …but still seen as expensive However, the industry is still dogged by consumer concerns over value for money. Despite the average activity cost having fallen significantly – from £124 in 2001 to an estimated £99 in 2006 - experience days out are still seen as expensive by 57% of consumers. Consequently, the experience market is vulnerable to economic downturn and fragile consumer confidence. ➔ Half of the people would like Have experienced Would like to experience Not for me to experience cooking classes % % % Driving (eg go-karts, rallying, quad bikes etc) 28 32 41 Sport (eg venue tours, participating etc) 24 20 56 Adventure (eg paintball, climbing etc) 23 26 52 Hobby/creative (eg learning how to garden etc) 19 36 45 Aviation (eg flying lesson, helicopter trip etc) 14 45 41 Pamper/body & soul (eg spa day etc) 14 48 38 Dining (wine tours, cooking classes) 12 49 38 Fame (eg recording studio, circus skills etc) 6 22 72 Experience of and interest in experience days out, Mintel, November 2006 2 Experience Days Out - Market of Experience Days Out, UK, January 2007, Mintel Page 6
  9. 9. Adrenaline activities still the most popular… Driving, flying and adrenaline activities are still Pampering / Relaxation highly popular and are likely to remain at the core 20% of the experience market in future years. …but ‘softer’ experiences will drive growth Driving / Flying 30% However, the product mix is beginning to Adrenaline / Adventure 20% gradually diversify away from the traditional ‘macho’ image and gravitate towards the softer, Other lifestyle-led end of the market. Pampering and 30% relaxation experiences are currently a major area of focus for most experience operators. Consumer research indicates that experiences Estimated segmentation of the experience days out market, by value, 2006, Mintel outside the traditional range have the highest potential for attracting new customers. There is particularly strong untapped demand for days out centring on wildlife/nature and gastronomic packages. 2.1.3 STRENGTHS AND WEAKNESSES IN THE MARKET Well suited to Lucrative Adventurous Affordability internet B2B consumers purchasing opportunities EXPERIENCE DAY OUT MARKET Lack of Supply chain Lack of Industry complexities differenciation standards Strengths Adventurous consumers: Consumers are up for the unknown, more aspirational, willing to experiment, and less inclined than in the past to postpone lifelong dreams. It has become less of a treat to be given such items as presents on special occasions. Both gift givers and receivers are looking for something ‘a bit different’. Page 7
  10. 10. Affordability: Many experiences used to be more expensive, and beyond the pocket of many gift buyers. But cost is falling as ease of price comparison on the Internet exerts downward pressure and a growing host of third-party operators stiffens competition. Internet: The Web is ideally suited for selling intangible leisure products, such as experiences. B2B: The corporate segment of the market is showing strong growth, representing over half the business of some operators. Selling B2B often involves much higher volumes of experiences (eg an away day for a whole department), and is particularly lucrative. Weaknesses Too many links in the chain: Selling experience days out is more complex than most consumer businesses. The distribution chain can involve two customers – the experience gift buyer and the person who participates in the experience – as well as the intermediary operator, the experience supplier, and, in the case of high street sales, the retailer. All parties need to be satisfied and two, or sometimes three, need to make money out of the transaction. Lack of industry standards: Barriers to entry are very low in the market, and the past years have seen a plethora of online operators come and, in some cases, go. There is no industry body to maintain safety standards, regulate or represent operators as there are in many longer-established leisure sectors. This puts the whole industry at risk, as any future damage to its reputation could seriously undermine the confidence of consumers, suppliers and retailers. The key is pushing the boundaries: The relative lack of differentiation in the marketplace means that most operators are offering the same range of core experiences, and there is an overall uniformity as to what constitutes an ‘experience day’. Traditional experiences are getting saturated and product innovation increasingly involves broadening the parameters of what constitutes an experience day out. That is why Smartbox is innovating to create a brand new cookery lesson. 2.2 THE COMPETITION IN THE EXPERIENCE DAY OUT MARKET 2.2.1 A SHIFT TOWARDS THIRD PARTIES The industry has its historical roots in direct supply, i.e. a large number of small companies and organisations offering localised facilities within a specialist product area, such as local motor racing circuits or flying schools. Facilitated by the Internet, and boosted by a growing high street retail presence, the shape of the sector has been gradually transformed by the emergence of the voucher-based third-party operators. Page 8
  11. 11. Despite the attempts of newcomers Company Estimated market share % to join the club, a handful of well- Red Letter Days 11 established third-party players continue to predominate. Their stronger brand Buyagift 7 names and high street relationships Virgin Experience Days 7 enable them to command better Activity Superstore 5 discounts from suppliers and, despite the eXhilaration 4 ease of starting up as an Internet 1 business, it is hard for new entrants to Other third-party operators 9 generate high volumes. Mintel, 2007 2.2.2 MAIN THIRD-PARTY COMPETITORS TO SMARTBOX Red Letter Days: created in 1989, Red Letter Days is one of the pioneers of the experience day out concept and, for many years, has been the clear market leader. It has one of the largest product portfolios in the sector, with over 900 experiences. Buyagift: is another leading player formed in the late 1990s, at the time when the experience days out market was starting to take off. The product portfolio is one of the largest in the marketplace, with 700+ experiences on offer. Buyagift also offers a range of around 300 traditional (ie non- experience) gifts, such as fine wines, flowers and chocolates. Buyagift operates a predominantly Internet distribution model. Virgin Experience Days: Virgin has a smaller product portfolio (100+ experiences) than many of its competitors, but focuses on the Virgin brand awareness and its values of innovation and customer service. Activity Superstore: in 2003, the group was placed in the top ten of The Sunday Times 100 fastest-growing private companies. The product portfolio consists of 400+ experiences. The company is a market leader in supplying experience days out to the high street thanks to partnerships with Boots, WHSmith, Argos and Debenham. eXhilaration: eXhilaration was acquired by in 2001. It provides branded experiences for the Lastminute website, as well as experiences for the corporate market under the ‘eXhilaration’ brand name itself. The product portfolio comprises around 250 experiences. The range of activities has been stripped down to be more carefully targeted. The group aims to be very competitively priced, but also sees its major strengths as the security and recognition of the Lastminute brand. Page 9
  12. 12. is one of the larger operators in the sub-£1 million sales bracket. The company has a wide portfolio of 450+ experiences and also sells traditional gifts. The business model is mainly reliant on Internet distribution. The company estimates that its customer base is weighted essentially towards females and is trying to appeal more to men through a recent web redesign aimed at making its site ‘less girly’. Other third-party operators Days to Amaze, which was founded in 2001 and claims to be “the fastest-growing gift experience company in the UK”, based on its commitment to high-quality customer service. Into the Blue, founded in 1996, which emphasises its strengths as an easy-to-use website and a competitive pricing policy. Fantastic Days Out, whose product areas include Air Sports, Motor Sports, Health & Beauty, Golf & Leisure and Wild & Wonderful. Grand Adventures, which focuses on the corporate market and emphasises its competitive pricing. Localised single-experience suppliers Beyond the third parties, the experience days out market splinters into a multiplicity of localised product suppliers, such as regional motor sport tracks, day spas, riding schools etc. Many of these organisations sell both directly to the customer and offer their experiences at discount rates to one or more of the third-party intermediaries outlined previously. Page 10
  13. 13. 3. THE MARKETING PLAN FOR THE SMARTBOX FRENCH COOKERY LESSONS 3.1 SEGMENTATION OF THE EXPERIENCE MARKET 3.1.1 TARGETS OF THE EXPERIENCE DAY OUT MARKET Young men are the core target but women and third age are growing fast Consumer researches3 demonstrate that men under the age of 35 are currently the core demographic target for the experience days out market, while the current decade is producing a significant growth peak amongst young adults, particularly in the 20-24 group, and most dramatically amongst young men. Experience day outers are most likely to be male, with a youthful bias. However, there is significant untapped demand amongst women and scope for selling to older age groups in the ‘softer’, lifestyle-led product areas. 3.1.2 TARGETS OF THE COOKERY LESSONS A strategic audience: the Londoners Smartbox French Cookery Lessons will be commercialised only in Central London. This choice is motivated by the fact that household expenditure in London is 13% higher than in any other region, at £376 per week. Of this, 16.2% is spent on food: an average of just under £19 per person per week - a full £2 higher than the national average. This level of spend and the proportion of the population living in London are highly attractive to Smartbox. The active social nature of London enables people to absorb different styles, cultures and tastes. Londoners are twice as likely to eat out regularly than those living in any other region, and, unsurprisingly, they spend more when they do. They are also more adventurous in the kitchen and less tied to any regime or routine, and are therefore free to experiment more with the tastes, ingredients and styles that they encounter. Widespread interest in expanding knowledge and skills ❝ Half of the people (or 49%) are perfectly happy with their present cooking habits, so by implication around half of consumers would like to change or improve their cooking in some way. ❞ The most common aspiration by some distance is the general one of wanting to be a better cook (quoted by 38% of respondents), while 23% would like to learn more about different foods and 3 Experience Days Out - The Consumer: Are they Experienced?, UK, January 2007, Mintel Page 11
  14. 14. cuisines. In addition, smaller proportions cite wanting to cook more complicated recipes (17%). Taken together, the findings show a widespread interest in learning more about foods and improving cooking skills 4. Socioeconomic status of the Smartbox French Cookery Lessons’ targets Age: While under-25s are the least likely to cook from scratch, they are also the most likely to want to learn more about different foods, and to want to improve their cooking skills. Young people will be our core target. Gender: Men are just as likely as women to be adventurous in their cooking and almost as keen to try new recipes. So we will not focus on either of the genders. Generally, the most likely groups to want learning more about different foods and cuisines are ABC1s and younger consumers, and it is becoming obvious that, at least among younger age groups, men and women are not that different in terms of attitudes towards cooking. Assessing targets: five groups identified There are five consumer typologies in terms of cooking attitudes. These are the: Food Oblivious (37%), who have little interest in food and are unlikely to change their cooking habits; Convenience Seekers (20%) who are far more likely than average to be using more prepared foods; Simply Nutritionals (15%) who aim primarily to ensure their meals are nutritionally balanced; Quality Seekers (13%) who are using a wider variety of ingredients and better ingredients than formerly; Creative Chefs (16%) who have a high degree of interest in cooking. They feel more confident and they cook more from scratch, make more complicated dishes and claim to be more adventurous. Quality Seekers and Creative Chefs make the best targets Clearly it is the Creative Chefs and the Quality Seekers who are most likely to be interested in trying new recipes and ingredients, and to prove to be the best targets for any media coverage of cooking just like Smartbox and its new French Cookery Lessons Box. While Quality Seekers are more likely to be women, men and women are equally predisposed to be Creative Chefs, and both typologies are more likely to be ABC1. Membership of the Quality Seekers typology starts to increase among the 25-44s, rising further and peaking at 20% of 55-64s. These consumers are thus more likely to be experienced cooks, and they provide a contrast to some extent with the Creative Chefs who are somewhat younger in age, with their peak in the 20-34 age group, although they include significant proportions of all age groups except the over-64s. 4 Media Influence on British Cooking Habits, UK, April 2007, Mintel Page 12
  15. 15. Food Convenience Creative Simply Quality Base: 1,473 adults Oblivious Seekers Chefs Nutritionals Seekers % % % % % All 37 20 16 15 13 Men 46 18 16 11 9 Women 28 22 15 19 17 15-19 48 25 17 6 5 20-24 31 30 20 11 9 25-34 31 23 23 10 12 35-44 34 24 16 15 12 45-54 37 17 15 17 15 55-64 35 14 13 17 20 65+ 44 14 8 23 12 AB* 27 17 18 21 18 C1* 32 22 18 15 14 C2* 44 20 14 12 11 D* 46 21 13 11 10 E* 46 21 10 17 7 To conclude, our targets for the new Smartbox French Cookery Lessons will be men and women, aged between 20-34 and 45-64 who live in London and who are ABC1* (Upper middle class; Middle class and Lower middle class). * Description of the different Socioeconomic status in Page 22 Page 13
  16. 16. 3.2 PRICE As we explained in page 6, experience days out are still seen as expensive even if the prices decreased by 20% in five £69,90 years (from £124 in 2001 to an estimated £99 in 2006). Therefore, we will downgrade the price of the Smartbox French Cookery Lessons. Following the example of France in which this product is priced 79,90€ (≈ £69,84), we will set the price of £69,90 for our new product. This price allow us to be positioned in the mind of consumers as one of the lowest priced experience day out sailor on the market. Our aim is to reach the level in which the psychological barrier falls: the service provided is not cheap enough to appear worthless and higher enough to guarantee a certain level of quality. 3.3 DISTRIBUTION CHANNELS BALANCED BETWEEN ONLINE SALE AND HIGH STREET RETAIL The most significant distribution channel for the Smartbox French Cookery Lessons will be internet through the Smartbox’s Website. Indeed, intangible, experience-based products are ideally suited to Internet commerce. It allows us to keep overheads low, delivery fast and efficient, and guaranteeing prompt payment of suppliers. Moreover, there are fewer complex supply chain issues, and online purchase facilitates greater spontaneity and opportunities for last-minute buying. Moreover, UK Internet penetration has been steadily rising over the past years, reaching over a majority of the population. Therefore, an internet sale strategy does not represent an obstacle to the purchase of the product for the customer. It is important to underline that high street retail is likely to decline as Internet sales drive future industry growth. On the high street, shelf space is critical and there is only room for the bestselling products. This has been a factor in restricting the range of experiences on offer. By contrast, the Web enables many more niche products to be sold. Online direct selling enables us to cut out the retailer’s margin. However, for the leading brands, the high street remains a very important channel for brand awareness. In this way, to ensure a visibility to the new Smartbox and more generally to the brand, a high street retail strategy will be maintained, at least for the next few years. We have several partners in Central London that ensure the Smartbox products a presence in the mind of consumers. We will also intent to establish new partnerships with retailers that could be interested in selling the Smartbox French Cookery Lessons because it is closely related to their business and their customers. Page 14
  17. 17. In this way, we plan to sell the new Smartbox in the London flagship of: Borders: (already a Smartbox retailer) is one of the UK’s leading booksellers. With its 60 stores, the company takes around 8% of the retail bookselling market. Virgin Megastores: is an international chain of entertainment retailers. The company expanded to hundreds of stores worldwide in the 1990s that sales books, consoles, DVDs, games, magazines and music. WHSmith: is a British retailer, well known for its chain of high street shops selling books, stationery, magazines, newspapers, and entertainment products. It has been an innovative company, being the first chain store company in the world. MenKind: (is already a Smartbox retailer) Menkind was founded with the aim of solving the problem of what to buy for men. With a diverse range of products it is an up and coming presence in the men's accessories and gift market. Menkind were a finalist in the Emerging Retailer of the Year category of the prestigious Retail Week Awards 2006, one of only five companies selected from over 200 entrants. John Lewis: The John Lewis Partnership is a major United Kingdom retailer which core products are clothes, cosmetics, housewares, food, services, travels. The stores are in a mixture of city centre and regional shopping centre locations. They are generally the largest or second largest department store in their local market. The company is the 3rd largest UK private company in the Sunday Times Top Track 100 for 2008. The chain's image is upmarket, and it appeals strongly to a middle class core of shoppers. In accordance to our targets, we picked up these five high street retailers in our distribution strategy especially because they are specialised in the sale of entertainment products and well known around UK. We also plan to distribute the new Smartbox French Cookery Lessons in up-market food retailers considering the fact that they are the most likely to reach our targeted audience in term of socioeconomic status: Marks & Spencer: is a major British retailer, with over 840 stores in more than 30 countries around the world. It is the largest clothing retailer in the United Kingdom, as well as being a food retailer, and as of 2008, the 43rd largest retailer in the world. Since a few years, it has started expanding into other ranges such as homewares, furniture and technology. Page 15
  18. 18. Harrods: is a department store located in Knightsbridge, London. The store has over one million square feet (90,000 m2) of selling space in over 330 departments. This makes Harrods one of the largest department stores in the world. The Harrods motto is Omnia Omnibus Ubique — All Things for All People, Everywhere. Several of its departments, including the Food Hall are world famous. Fortnum & Mason: is a famous department store situated in central London (Picadilly Street). Fortnum and Mason is recognised internationally for its high quality goods and as an iconic British symbol. It is possibly one of the most famous stores in the world. Its fame rests almost entirely on its magnificent food hall, stocking an extraordinary variety of exotic, speciality and also 'basic' provisions. It is also the location of a celebrated tea shop. 3.4 A DIRECT MARKETING STRATEGY PREFERRED FOR THE PROMOTION Generally, the industry of experience day out spends little on traditional above-the-line advertising5. Direct marketing and Internet advertising are most commonly used. We will not use mass media such as television, radio or cinema because it is far less easy to target precisely selected audiences like ours and they require production specialists that imply high absolute costs. This kind of media does not satisfy us also in the way that they provide short exposure time and short message life. On the contrary, we will focus the communication campaign on direct media such as direct mail, e-mail, public relations, internet pay-per-click advertising, press (mainly magazines) and sales promotion. The communication on the new Smartbox French Cookery Lessons will be done via some media far more specialised or which audience is easily targetable. In this way, magazines ensure us an efficiency for the advertising campaign that will enable us to reach far more easily our targeted audience: they touch large audience segmented demographically and geographically, they provide high quality reproduction and high informational content, and they can be used for coupons/vouchers. Moreover, the ad benefits from magazine’s credibility and lasts as long as magazine is kept and read thanks to the multiple readership of magazines. 5 Above the line is a type of advertising through mass media such as TV, cinema, radio, print, banners and posters to promote brands. This type of communication is conventional in nature and is considered impersonal to customers. It differs from Below the line advertising, which believes in unconventional brand-building strategies, such as direct mail and printed media (and usually involve no motion graphics). Page 16
  19. 19. For example, we plan to advertise in magazines such as: Bon Appetit 12 issues per year - 120.000 publications a month ❝ The all-in-one guide to fabulous food, fine wine, and fun entertaining ❞ Gourmet 12 issues per year - 250.000 publications a month ❝ Gourmet educates you on a variety of different topics that all share one commonality: good living. It blends a mixture of good food, ❞ travelling, entertaining and culture to help you live to the fullest. Saveur 9 issues per year ❝ Shows you around the places that have given birth to the world's great foods. You'll savour both the humble offerings of provincial cafes and the haute cuisine of elegant three-star restaurants. ❞ Rediscover authentic cuisine with Saveur. We will also communicate via much a more direct, personalised approach using Direct Marketing techniques and e-tools to target specific audiences. Direct mail and e-mailing will be perfect because it will enable us to reach the precise audience we targeted in our market survey. Including the cost to send the mail and to buy consumer databases, it remains really low cost and financially advantageous for us regarding the scale of the potential audience reached. Internet advertising will also be used in the communication strategy for the launch of the new Smartbox. Indeed, in respect to its very low cost, it provides a huge flexibility regarding the exposure duration, the choice of an adequate audience and an great adjustability for creative messages. Some examples of the websites in which we plan to advertise: Simulations of advertisements are available Pages 22 & 23 Page 17
  20. 20. Finally, for the communication about the new Smartbox, we will go through sales promotion with some events like vouchers/coupons, free gifts or competitions. Sales promotion are a short term tactical tool that will allow us to create awareness and visibility and to add value to our new product during its launch. 3.5 JAMIE OLIVER, THE IMAGE OF THE NEW SMARTBOX Celebrity endorsement - an effective marketing tool There is a notable growing use of celebrity endorsement6 as an effective marketing tool in the promotion of kitchen utensils, food products or restaurants. Such endorsement relies heavily on the goodwill and position of trust between celebrity chef and consumer. Propelled by their huge media exposure, celebrity chefs are trusted and seen as role models that have a massive affect over consumer attitudes and purchasing behaviour. Consumers are less likely to be sceptical over the product as celebrity endorsement offer a clear market differentiating market benefit. Jamie Oliver is the celebrity chef of the moment, having been discovered by the BBC in 1998. In a relatively short timescale he has become firmly established as a major star. Over a quarter of adults enjoy watching Jamie Oliver on television. His programme, The Naked Chef, became an overnight success, attracting an audience that wouldn’t normally watch food programmes. Jamie’s distinctive personal style, enthusiasm and trademark phrases struck a chord with the British public. We plan to associate Jamie Oliver with our new Smartbox French Cookery Lessons to attract an even more important audience and to make the product having a clear competitive advantage compared to its competitors. In this way, he will appear on the adverts initially and we will try to pursue the endorsement contract in the future as the new Smartbox gets an increased awareness and does not need a celebrity chef to get more visibility in the market but still need it to maintain a high trust level between us and the consumer. 6 Product endorsement occurs when a celebrity allows their name or image to be used to validate a product, brand or service with a view to enhance its standing in the marketplace, on the basis of this affirmation by a celebrity deemed to be discerning in his or her choice. Page 18
  21. 21. 3.6 ESTIMATED EXPENDITURE FOR THE COMMUNICATION CAMPAIGN Magazines Number of Estimated Estimated Price of a half Price per Total Magazines monthly monthly page ad reader publication readership 3 ± 100.000 ± 200.000 £4.000 0,02 £ £12.000 Internet Advertising (Standard Internet banner) Number of Number of Estimated Price of a Price per Total Websites appearances readership banner reader 8 1.000.000 250.000 £2.500 0,01 £ £20.000 Sales Promotion Average loss of Number of Loss due to Estimated Estimated Estimated money related products money-off investment in investment in total shortfall to money off affected with promotion over gifts competitions due to Sales promotion money-off the 1.500 Promotion promotion boxes 10 % 1.500 £10.485 £4.000 £2.000 £16.485 E-Mail & Direct Mail Number of Estimated cost Number of Estimated Estimated cost Total e-mails sent of e-mail letters sent expenses for buying campaign (stamps, consumer (conception, printing, databases manpower) manpower) 7.000 500 £ 5.000 £2.500 £4.000 £7.000 ESTIMATED TOTAL COST OF PROMOTION FOR SMARTBOX FRENCH COOKERY LESSONS £48.492 3.7 A LAUNCH SCHEDULED FOR CHRISTMAS Around two-thirds of the experience days out bought from the leading third-party intermediaries are given as personal gifts. Year-round birthdays and anniversaries help to spread business flows, but there are key spikes for most operators around Valentine’s Day, Mother’s Day and Father’s Day. The major seasonal peak is inevitably Christmas, both for high street retail sales and on the Internet. Christmas is also the peak time in the corporate incentives market. Page 19
  22. 22. Christmas is coming Despite uncertainty on the high street, Christmas gift spending in 2008 was up on the previous year, with the average spent on gifts rising from £365 per person in 2007 to £400 in 2008 7. Therefore, we just have enough time to set up the contracts and we will be able to launch the brand new Smartbox for Christmas to take advantage of the huge sell rise in the end of the year. Thus, the communication campaign will begin around late October 2009 and everything will be ready in early November. A first check-up will be undertaken late November in order to be ready to face the rush of Christmas shopping. CONCLUSION Smartbox is present in 12 countries in Europe and as well in United States, Canada, Japan and Brazil. We are currently selling 62 models of Smartbox and plan to launch the new Smartbox French Cooking Lessons in UK because this country more than any other one is really receptive to the image of French heritage and gastronomy. The market of the Experience day out is ready for being penetrated by brand new products: the consumer does not want anymore some material products but tend to be attracted by personal fulfilment. The keyword nowadays is: being not having. That is exactly what Smartbox provide There are major competitors in UK but except some minor companies, none of them provide French Cookery Lessons. Thus, we come into the market with a great competitive advantage. Our core targets for this new Smartbox will be men and women, aged between 20-34 and 45-64 who live in London and who are ABC1. To reach this target we built a distribution strategy that focus on Internet through the Smartbox’s Website while maintaining a high street retail strategy with partnerships with 8 major retailers in london. We are going to communicate via magazines, Internet, direct mail, e-mail, and sales promotion for an approximative cost of £50.000. The final touch of our communication strategy will be the celebrity endorsement: the new Smartbox will be endorsed by Jamie Oliver, a famous English chef. We plan to sell 3.000 Smartbox French Cookery Lessons in the first year. We also believe that it will allow us to improve our awareness and brand image in the UK. We are really confident in meeting the success with this new challenge in UK. 7 Mintel’s forthcoming Christmas Shopping Habits, UK, 2007 Page 20
  23. 23. SOURCES Mintel’s forthcoming Christmas Shopping Habits Regional Eating and Cooking Habits Celebrity Food Brands & Influences on the Food Market The Effect of Celebrity Chefs Media Influences on British Cooking Habits Experience Days Out Market Page 21
  24. 24. APPENDICES 1. SOCIOECONOMIC STATUS Social Grade Social Status Occupation Higher managerial, administrative or A Upper middle class professional Intermediate managerial, administrative or B Middle Class professional Supervisory or clerical, junior managerial, C1 Lower middle class administrative C2 Skilled Working Class Skilled manual workers Semi and unskilled manual D Working Class workers State pensioners or widows (no other E Those at lowest level of subsistence earner), casual or lowest grade workers 2. ADVERTISEMENT SIMULATION Advertisement Page 22
  25. 25. Advertisement Advertisement Saveur Magazine Page 23