Transcript Chargers Candy

Chargers Candy
Team A2
Elvis Amankwah
Josh Letourneau
Grandon Smith
Charlie Echols
Tom Meaker
Company
• Founded November 2001
• Mother/Daughter Mgmt Team
• “Innovator of the Year” by Confectioner Magazine – 2002
• 2003 “Best Confection in Category” Canadian Grocer Magazine
• Filmed and Featured on Food Network’s “Treats of the Trade”
• 2 Products – “Chargers” and “Chili+Lime Gum”
Company Problems
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Finances: Lack of widespread branding and rising “slotting fees” apply
financial demands that the company is not in a position to currently
overcome.
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Distribution: Finding salespersons to represent Chargers Candy within
the North America segment is difficult with only two offerings currently in
product line.
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Warehousing/Logistics: Rising fixed expenses due to changes in the
logistical structure (primarily storage and warehouse space) have placed
additional financial strains on the company.
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Cost of Capital: Chargers Candy currently is pursuing additional
financing, but capital markets for extremely small firms have become
increasingly competitive. In addition, the cost of capital has risen steeply
since 2001.
“Chargers”
• Chargers” are red, caffeinated, chocolate
covered espresso beans that are sold in a
patented tin that resembles a D-cell battery.
• Points of Difference: Unique Packaging and
Portion Control
“Chargers”
Chargers Distribution
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Cost Plus World Market
Barnes and Noble College Division
Harmon Stores
Walgreens
Planet K
Chapters Canada
Mac's Canada
7-11 Canada
Chemical Evolution
Competitors
• “Energy Candy” Category
Competitors (Cont.)
• Shock-A-Lots
• $1.50 Retail
Competitors (Cont.)
• Buzz Bites
• $3.99 Retail (per tin of 6 candies)
Competitors (Cont.)
• Caribou Coffee “Reindeer Nibblers”
• 1.75 oz.
• Retail $2.95
Customers
• Young Affluents in Hong Kong
• Breaking consumer research within said market show
that coffee appeals to “adventurous, open-minded,
young, affluent, urban consumers that are more exposed
to Western influences and tend to look up to Western
lifestyles.”
Note: Euromonitor Research
Customers
• Another large consumer group, which influences the
coffee consumption, is returnees. China has seen an
influx of returnees (mainland Chinese students returning
from Western countries) over the last five years.
• Euromonitor says that many of these returnees have
lived in Western countries for a decade and they have
become accustomed to the coffee culture. Like the
growing number of expats now living in China's main
cities, these returnees are helping to push the high end
of the coffee market in particular.
Young Affluents
• "A consumption crazy, aspirational, driven
generation, they are money-focused yet
moral, school is important and success
everything. Their favorite food is fast,
favorite drink is soft and preferred birthday
gift a mobile phone.“
Note: Synovate PAX Research
Young Affluents
• 8 in 10 Young Asians influence family shopping for soft
drinks/snacks
• 3 in 4 influence the family visit for fast food
• 6 in 10 influence tv channel selection during shared viewing
• 62% own mobile phone
• 45% own personal desktop
• 50% of 12 to 24 year-olds name the Internet as the most helpful
medium for product and service information over TV (32%) and
newspapers (10%).
Young Affluents
• Today's Young Asians worry about the future ahead and what being
an adult may hold for them. A secure job is the number one concern
about growing up for 19% of Young Asians, while 16% worry about
being financially stable and 9% worry about adult responsibilities.
• 18% voted world peace as the number one change they would make
to the world. A further 16% are aspiring activists, wanting to change
social problems like drugs and corruption.
• While listening to their MP3 players (owned by 23% of respondents)
you'll find Young Asians searching the web for information, emailing,
downloading entertainment and interacting with their friends, and
games, online.
External Environment
• Hong Kong is an ideal market platform for doing
business in Asia, especially China.
• Why? – “Free port” with virtually no tariffs/duties. Strong
rule of law and respect for property rights. Hong Kong
partners typically know and have close links to markets
in China and the rest of Asia.
External Environment
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Open to international tourism, trade, and investment.
Population: 6.9 Million
Visitors: 20 Million
GDP Per Capita: $36,800
GDP Growth: 8%
U.S. Exports: $13.5 Billion (11.9% of Hong Kong’s
Imports)
External Environment
• Other Strong Points of Hong Kong
• World-class infrastructure
• Free-flow of information
• No restrictions on inward/outward investment
• No foreign exchange controls
• Simple, low-tax regime
• World Financial Center
External Environment
• Market Entry Strategy
• A. Hong Kong agents and distributors can increase sales of U.S.
products in both Hong Kong and China.
• B. Hong Kong firms are eager to work with exporters.
• C. Companies entering this market should understand Hong Kong’s
fast-paced business climate.
External Environment
• Trade Promotion and Advertising
• Special Trade Fairs and Exhibitions (HKCEC – Hundreds of
exhibitions held annually)
• Advertising and other PR activities (TV daily audience is 2.25
million. Hong Kong tv also reaches neighboring Guangdong
province).
• Seminars
• In-store Promotions
• Joint Promotions