Introduction Ferrero is an Italian manufacturer of branded chocolate and confectionery products and it is the third biggest chocolate producer and confectionery company in the world. It was founded in 1946 in Alba, Piedmont, Italy, by Pietro Ferrero, a confectioner and small-time pastry maker who laid the groundwork for Nutella and famously added hazelnut to save money on chocolate. The company saw a period of tremendous growth and success under Pietro's son Michele Ferrero, who in turn handed over the daily operations to his sons. His son Pietro, who oversaw global business, died on April 18, 2011, in a cycling accident in South Africa at the age of 47. The Ferrero Group worldwide – now headed by CEO Giovanni Ferrero – includes 38 trading companies, 18 factories, approximately 21,500 employees and produces around 365,000 tons of Nutella each year. Ferrero International SA's headquarters is in Luxembourg. Ferrero is a private company owned by the Ferrero family and has been described as "one of the world's most secretive firms". Reputation Institute's 2009 survey ranks Ferrero as the most reputable company in the world. The recently announced financial results for the fiscal year ending August 31, 2016 showed consolidated sales growth of 8.2% from the previous fiscal year.

1. Ferrero
Introduction
Ferrero is an Italian manufacturer of branded chocolate and confectionery products and it is the third
biggest chocolate producer and confectionery company in the world. It was founded in 1946 in Alba,
Piedmont, Italy, by Pietro Ferrero, a confectioner and small-time pastry maker who laid the
groundwork for Nutella and famously added hazelnut to save money on chocolate. The company
saw a period of tremendous growth and success under Pietro's son Michele Ferrero, who in turn
handed over the daily operations to his sons. His son Pietro, who oversaw global business, died on
April 18, 2011, in a cycling accident in South Africa at the age of 47.
The Ferrero Group worldwide – now headed by CEO Giovanni Ferrero – includes 38 trading
companies, 18 factories, approximately 21,500 employees and produces around 365,000 tons of
Nutella each year. Ferrero International SA's headquarters is in Luxembourg. Ferrero is a private
company owned by the Ferrero family and has been described as "one of the world's most secretive
firms". Reputation Institute's 2009 survey ranks Ferrero as the most reputable company in the world.
The recently announced financial results for the fiscal year ending August 31, 2016 showed
consolidated sales growth of 8.2% from the previous fiscal year.
History
The Ferrero was founded in 1946 in Alba, Italy. Shortly after release production was halted due to a
problem with label printing. Michele Ferrero, the credited inventor, named the chocolate after a
grotto in the Roman Catholic shrine of Lourdes. Rocher comes from the French and means rock, the
main grotto at the Lourdes shrine is in the rock of Massabielle.
1950 – Michele Ferrero took over the company with his uncle and mother.
1956 – European debut the Ferrero factory open in Germany.
1964 – Nutella is launched.
1968 – The kinder division is formed delicious treats specially made for children.
1969 – Tic tac is launched in America.
1975 – Kinder surprise is launched in France.
1980 – Six new products including Ferrero Rocher.
1982 – The Kinder and Ferrero brands are loved and enjoyed in all five continents.
1991 – Foundation Ferrero is registered as a charity chaired by Michele Ferrero’s wife Maria Franca.
1992 – Ferrero Mexico opens its doors.
1994 – Operations in Brazil start with Kinder Surprise.
1995 – Ferrero enters the Russian market.
1996 – Ferrero begins construction of the factory in Poland.
1997 – Pietro and Giovanni Ferrero, Michele’s sons, take over the reins of the Group.

2. 2005 – Michele Ferrero is awarded Knight Grand Cross by the Italian President.
2007 – Ferrero opens offices in China.
2009 – Ferrero wins the prestigious international ‘Reputation Award’. Nutella is served at the G8
summit.
2010 – The group has 18 manufacturing plants, of which four are in Italy. In June, the first Ferrero
CSR report is presented.
2012 – Ferrero launches Raffaella in Brazil. Kinder Joy and Tic Tac are exported to the Middle East
& South-East Asia.
2013 – Ferrero creates two new production plants in Mexico and Turkey bringing the total number
within the group to twenty.
2014 – Ferrero makes a $70 million hazelnut investment in New South Wales, Australia.
Ferrero buys Oltan Group, the world’s largest hazelnut producer, forever securing its long-
term competitive advantage and providing security for its production in decades to come.
Nutella is 50 years old and enjoyed in 160 countries with over 360,000 tons of the delicious
hazelnut spread produced every year.
Ingredients
The chocolate consists of a whole roasted hazelnut encased in a thin wafer shell filled with hazelnut
chocolate and covered in milk chocolate and chopped hazelnuts. Its ingredients are milk chocolate,
sugar, cocoa butter, cocoa mass, skim milk powder, butteroil, lecithin as emulsifier, vanillin, whey,
hazelnuts, palm oil, wheat flour, low fat cocoa powder, sodium bicarbonate, and salt.

3. Brands
Hazelnut
In 2013 a $60 million hazelnut development business was approved in South Wales in Australia.
Ferrero had been working on this for sometimes and operation would see $1 million trees planted in
two firms. The first commercial crop is expected to be in full production in 2021. At full production
the firm expected to generate some 5000 tons of hazelnuts. The initiative should also help to
convince other growers to reconsider hazelnut as a cash crop. Potentially, the hazelnut export
business is worth $170 million in Australia each year.
Kinder Chocolate
Kinder Chocolate is a confectionery product brand line of Italian confectionery multinational Ferrero
Spa. Kinder was developed and produced at Ferrero Germany (Frankfurt) in 1967 for the German
market. One year later (in 1968) it was sold in Italy, before reaching the countries along the
Mediterranean Sea.
Tic Tac
Tic Tac is a brand of small, hard mints, consisting of 94.5% sugar, manufactured by the Italian
confectioner Ferrero, and are available in a variety of flavor’s in over 100 countries.
Tic Tacs were first produced in 1968. They are usually sold in small transparent plastic boxes with a
flip-action living hinge lid. Originally, Tic Tacs were dyed specific colors for different flavors,
although in many countries the transparent plastic boxes are colored and the actual Tic Tacs are
white.
Raffaello
Raffaello is a spherical coconut-almond confection that manufacturer Ferrero SpA brought to the
market in 1990. The total almond content accounts for 8% of the weight, and the total coconut
content is 23.5%.
The praline comprises a spherical wafer which is filled with a white milk cream and white blanched
almonds. It is surrounded by a coconut layer. Raffaello contains no chocolate, but does contain
lactose, making Raffaello incompatible for consumers with lactose intolerance. Likewise, almonds
instead of hazelnuts are included, which is relevant for those allergic to hazelnut.
Marketing Segmentation
Demographic
• Age :16 - 45 years old
• Marital status: Single and Married
• Ethnicity: all culture
Psychographic
• Lifestyle: Students, workers, teenagers
• Lovers
• Ferrero Rocher lovers

4. Geographic
• Region: Urban
• Density: Huge
• Nation: universal
Behavioral
• Occasions: Festivals, Social Functions, Valentine day
• User status: High Status
SWOT Analysis
Strength
 Unique product and taste
 Packaged by golden paper
Weakness
 Less popular chocolate brand product in Indonesia
 Quite expensive price among competitor
 Only for special occasions consumptions
 Packaging created luxuries & expensive image
 Small exposure through media
 Distributed more to modern outlet
 Opportunities
 Big market for Indonesia
Threat
 Market leader always follow by others
 Local brand
Marketing Mix
Product
Ferrero Rocher is the premium luxurious chocolate product of the Ferrero group which is usually
given as a gift during special occasions. Its main ingredients are sugar, milk chocolate, cocoa butter,
skim milk powder, butteroil, vanillin, palm oil, wheat flour, low-fat cocoa powder, sodium
bicarbonate, emulsifier and salt. The Ferrero Rocher chocolate is a ball which has a number of
layers. The inner most is hazelnut chocolate which is in the form of a ball inside which there is a
hazelnut. This hazelnut chocolate ball is coated with a thin wafer shell. There is another coating of
milk chocolate with bits of hazelnut in it on top of the wafer shell. The chocolate is wrapped in
golden color foil having the Ferrero Rocher sticker. Apart from this, there are other products in its
marketing mix which are offered. The offering is in boxes which may contain 3,16,24,28,30 and 42
pieces. The boxes which have been used so far have been of different shapes like bells, rectangles,
pyramids etc.

5. Price
Ferrero Rocher is a premium product and hence is priced higher than the usual chocolates. The
ingredients for example hazelnuts and the others used are expensive which add to the cost of the
product. Ferrero Rocher faces competition from companies like Lindt, Hershey, Cadbury and Nestle
but in spite of being in a competitive market it prices itself apart from the rest which gives the brand
a unique identity and puts it in the luxurious bracket. The prices may be slightly lower if purchased
online as compared to the retail outlets. Ferrero Rocher being a premium brand does not offer any
discounts to the customers. The marketing mix pricing strategy of Ferrero Rocher is thus a premium
pricing strategy. It targets the upper strata of the society.
Place
Ferrero Rocher is a prestige product and hence its availability is in select locations. It is available in
malls and big supermarkets where the people who visit are from that strata of the society which can
afford luxury products. Very few select retail outlets may sell these in upscale areas. Ferrero Rocher
is also available online on ecommerce platforms and discount deals can be obtained only through
these depending upon the individual sellers. The company has 22 production plants across 5
continents and sells the chocolate to 170 countries. The company employs Infolog GE and Skep
Forecasting to strengthen and monitor its distribution network. These tools enable it to account for
delivery schedules, demand, production etc. in an efficient manner. All its factories are ISO 9001
certified which assures great quality.
Promotion
The way the Ferrero Rocher has been crafted is very appealing especially because of the golden
wrapper. The chocolate is available in different types of boxes. The company sells it in boxes of the
shape of Easter Bunny during Easter to convey the message. Bell shaped and pyramid shaped boxes
are used for packaging it during Christmas. Thus, they promote Ferrero Rocher aggressively during
festive seasons as it is considered to be a very sophisticated gift. The company advertises heavily on
television in Italy. ‘Ambassador’s Reception’ is one of the classic adverts that it has had which made
its return to TV in 2003. ‘Share the Magic’ was one of the successful campaigns it has had over the
years. It has sponsored various events like fashion weeks and also the famous television show
‘Desperate Housewives’. Ferrero Rocher has separate Instagram and Facebook pages according to
countries so that it caters to the festivals of those countries and puts up relevant posts in connection
with those festivals. They also use print media like newspapers and also traditional channels like
billboards in some countries. Hence this completes the marketing mix of Ferrero Rocher.
Marketing Tactics
 Focus on segmentation target, the biggest percentage segment by age is between 5-14 and 15-60
years of age.
 Competitor penetration monitoring, SQ brand lead the sales of local product Giant sales 2010.
 Consider the low-price product to set foot firmly in the competition
 Penetration more often to potential market (contribute biggest revenue)
 To firm the positioning of the product and actively creative for the new products
 Smartly join sponsorship to raise company image
 Educate people as market target the importance of chocolate product

6. Marketing Strategy
Product
 Raw cocoa quality guarantee chocolate product quality
 Packaging of the product also secure the quality and image
 Good shape of the product
Price
 Use margin price method
 Market price survey
Promotion
 Advertising
 Sampling, demo, promotion, etc.
 Direct sales / online marketing
 Mouth to mouth and community sales strategy
Place
 Merchandising in modern outlets
 Company owned counter
 Canvassing to certain place
Competitors
Mars
Mars with 28% of market share (in value). The American group is set up in France since 1951. Mars
produces both categories of the chocolate confectionery market: chocolate bars with the brands
Mars, Snickers or Bounty and chocolate balls with M&M’s and Maltesers. Contrary to the other
manufacturers, Mars doesn’t organize seasonal promotion during Easter or Christmas, but it makes
other kind of operations. At the beginning of 2012, Mars launches a new product “M&M’s Peanuts
Noir Intense” and the chocolate bar Mars celebrates its 80 years.
Nestle
Nestlé with 14,2% of market share (in value). France is the second global market just after the USA.
Chocolate is the flagship product of the group, with different brands like Kit Kat, Smarties or Lion.
In 2011, Nestlé stretched the Kit Kat ball range, with a new product “Kit Kat ball chocolate blanc”.
Moreover, 2012 is the year where Kit Kat makes its come-back on TV commercial.
Kraft Foods and Milka
Kraft Foods with 6,2% of market share (in value). Thanks to the Cadbury buyout in 2010, Kraft
Foods has become the chocolate, chewing-gum and confectionery leader. The main chocolate brands
are Côte d’Or, Tobler one and Milka.
Since 2011, Milka has proposed a new chocolate confectionery range, with its Milka Snax brand.
This new brand is made up of five progressively launched products.

7. Milka is very active this year, indeed the brand also launched Milka Crispell with two products
(chocolate flavor and vanilla flavor), to reinforce its new chocolate confectionery range.
In January, Kraft repeated its transverse promotional operation: The Delice Days, with 20 brands of
chocolate, coffee and biscuit including for the first time Milka snax.
Just few weeks ago, we learned about the creation of the new Kraft division: Mondelez which
groups, amongst others things, the Milka chocolate or the Cadbury confectionery together.
Negative Side
Nutella is a worldwide brand, a well-known word which makes kids go crazy over it. The story of
Nutella had begun in 1964, when the Italian Company Ferrero started to produce this jar full of
deliciousness.
The brand is still held by the same company, but it is also produced in many countries by local
manufacturers.
Nutella was a success from the moment it appeared, kids cried over it and parents had headaches
because of it. As the time passed and with the various marketing strategies, Nutella has become the
number one product.
Since we are little, we learn that sweets are unhealthy and harmful for us and yet on Nutella`s label
stands the sign “No Artificial Colors and No Artificial Preservatives”, which may fool us into buying
this product, but if we go further into the jar`s label and do a little research, we will see that not only
is Nutella completely useless for consumption but it`s also far from healthy.
When we open a jar of Nutella, we see a delicious cream made of hazelnut, which not only smells
nice but it also tastes great. In order for manufacturers to get that even texture, Nutella undergoes
heavy processing which results in losing all the valuable nutrients.
Environment concerns
Ferrero's advertising campaign has drawn some political fire.
The anti-establishment 5-Star Movement, which is running neck-and-neck with the ruling
Democratic Party in opinion polls, has asked the Italian advertising authority to block Ferrero's
campaign and fine it for misleading consumers on both health and environmental risks.
A spokeswoman for the advertising authority said it had yet to decide whether to reject the 5-Star
complaint or take measures against Ferrero, adding that the process could take several more weeks.
The palm oil industry, dominated by producers in Malaysia and Indonesia, believes Ferrero is
playing an important role in addressing what it regards as misconceptions among consumers.
"It is good that Ferrero has clarified that the palm oil they use is safe and sustainable," said Yusof
Basiron, chief executive of the Malaysian Palm Oil Council.
He said Malaysian producers had not suffered any impact on their European exports after the EFSA
opinion. The Indonesian Palm Oil Association also said there had been no impact.

8. 1. Soy lecithin
It`s a waste product and its function are to keep fats and water from separating in processed food
such as peanut butter, ice-cream, margarine, baby formulas. Even though soy is consumed a lot in
the east, the west has different policies when it comes to manufacturing soy.
Soy products are definitely genetically modified and are regarded as extremely dangerous for the
environment and especially for consumers, causing immunological alternations, creation of allergies,
premature puberty, uncontrolled weight gain and even breast cancer. Genetically modified soy
contains toxicants which have fatal effects.
2. Skim milk
Due to the vast production of milk and its enormous need on the market, we can only assume the
conditions under which manufacturers get huge amounts of milk. Cows are fed on GMO corns and
they also use plenty of supplements in order to increase the production and reduce the cost. This
results in bad quality; tasteless milk made of powdered milk and causes bad cholesterol.
3. Vanillin
This ingredient gives the flavor in the Nutella, it is produced in China and it also cause addiction by
stimulating the brain and the hormone of happiness. Notorious ingredient responsible for destroying
brain cells. However, people mistake vanillin for vanilla, but this is just an extract which gives the
taste and flavor and it`s actually the most dangerous ingredient in Nutella and it`s full with
chemicals. It`s mainly produced in China (about 90% of it) and this includes Nutella.
But what is even more terrifying, vanillin contains MSG, a “secret ingredient” that couldn`t be
classified both as vitamin nor mineral, but it has been proven to stimulate our reward system of the
brain and therefore makes us eat more and more. MSG on the other hand, is consisted of glutamate,
sodium and water. Many scientists believe that such ingredients are responsible for many
neurological disorders, infections, endocrine disorders, obesity, seizures and diseases such as
Alzheimer`s, Parkinson`s, Huntington`s disease.
4. Sugar
Nutella contains processed sugar by weight. As you can suppose, Nutella contains an enormous
number of calories. The sugar is made out of sugar beet which is filled with pesticides and this type
can only harm your organism.
Refined sugar is related to ADHD, anxiety, autism, depression, ADD and migraine. I don`t think that
you will need a better reason to say NO to Nutella, there are so many negative side effects of its
consumption and yet you can easily replace it with healthy products which are as tasty as Nutella.
Future generation mustn`t get hooked on this product, because with time Nutella gets more
processed not healthier.

9. 5. Palm Oil
Not only is the high amount of sugar a negative side of Nutella but also the Palm Oil. Palm Oil is a
vegetable fat gained from the flesh of the oil palm. Palm Oil is also used in margarine, some
cosmetic products, detergent and aluminum. Palm Oil is the most important oil of the world. Over
the past years the demand of palm oil has grown from 25,6 million tons in 2001 to 46 million tons in
2009. Malaysia and Indonesia are the production leaders with 85 % of the world production.
Corporate Social Responsibility
For the Ferrero Group, the term corporate social responsibility has always stood for caring for people
and for the local area, namely employees and former employees, consumers, families and the local
communities in which it operates. These principles of social responsibility guided Ferrero's first
steps in Alba and remain unchanged to this day.
The Ferrero Group’s approach to sustainability is currently based on the company’s social
responsibility strategy: “Sharing values to create value”.
For Ferrero, the creation of shared value is a practice that affects all stages of the supply chain: it
goes from caring for the people who have made and continue to make the history of the Group, the
support of local communities, the promotion of active lifestyles among youths and their families, all
the way to its strong commitment to sustainable farming practices and safeguarding and protecting
the environment. Our corporate social responsibility strategy is currently divided into two main
subject areas: People and the Planet.
People
At Ferrero, customer focus isn't just a value, it's something we put into practice every day, based on
a sense of responsibility that goes beyond commercial goals. This responsibility is made into reality
through Ferrero's nutritional strategy, ongoing innovation, the quality and freshness of its products,
food safety and responsible and transparent communication. In addition, Ferrero shows a constant
interest in the lives of its current employees and former employees and people living in the
communities in which it operates. This commitment is also demonstrated through the activities of
the Ferrero Foundation and the Michele Ferrero Entrepreneurial Project, active in Africa and Asia.
The Group also continues its commitment to the promotion of active lifestyles by addressing young
people and their families through the global Kinder Sport “Joy of moving” program.
Planet
Monitoring and improving the impact of its activities throughout the entire supply chain is a priority
for the Ferrero Group, which it addresses by ensuring that its main raw materials are responsibly
sourced. In addition, the Group is committed to production that respects the environment, by making
use of the best technologies available, ensuring that the use of energy, materials and natural
resources is efficient and by consuming water resources responsibly and reasonably. Acknowledging
this responsibility, Ferrero is strongly committed to minimizing its environmental impact, from raw
materials to production plants and logistics, along the entire value chain.

10. Recommendations
Asia has the world’s booming economies while Europe and America are in a recession. Ferrero
should promote their products more in the Asian markets especially in China and India which has an
emerging upper middle class which will amount to half of the world’s population.
Localize the advertisements and promotions. Ferrero should look in to the culture, values, norms and
trends of the markets which they cater and then design the adverts and promotions.
The market which Ferrero caters is relatively inelastic to the price. They should try to increase the
prices and improve the profits.
Ferrero can use price differentiation in the markets by increasing prices in the markets which has
high purchasing power.
Ferrero can improve their brand image and sales in the local markets by sponsoring local events.
Get some customer feedback and carry out market researches frequently.