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Administrarea Afacerilor, an II Mangu Laura-Simona Grupa 204

Brand Positioning The battle of the mind: McCormick vs. Fuchs

Introducing the concept:
The brand is defined as a set of valuable features that can be identified and associated by the customers, rationally or emotionally, with a business or product that it’s been providing. As Michaels Eisner, CEO Disney sais „ A brand is a living entity, enriched or diluted over time, the cumulative result of thousands of small gestures”. The brand: -promises, guarantees and certifies; -creates emotional bonds stronger than any commercial resonable argument; -speaks to the consumer about his lifestyle, values and aspirations; -becomes legend: Ferrari, Nokia, Oxford etc.

Trust

Safety

Pleasure

Let’s not confuse promoting a certain product with positioning it on the market.

evan the superiority of products/ services. The positioning often involves shaping consumer’s perceptions.quantity.distribution channels. It is based over the advantage offered to the customer. while positioning is creating an identity in the mind of consumers. More specific. It has strategic character. a few years ago. It is a relative concept ( a product is placed in a strong competition with those existing already). Features of positioning: It takes place in the mind of clients. 99% of all bacteria.package. The funny part is that the soap.Administrarea Afacerilor. A product can by positioned on the market by the following elements: . This process means positioning. an II Mangu Laura-Simona Grupa 204 Promoting is part of the brand construction. . The message was so strong among buyers that those brands have increased sales. .price. .services provided. It anticipates the results and the future activity of the competition. For example. . by definition. some soap brands have begun to position themselves as ‚antibacterial” or as having the ability to remove approx. It changes everything. . but it sounds good to customers who want a reassurance that using that soap will remove the potential danger to their health. So naming a soap „antibacterial” is redundant. removes dirt and germs. in response to increased consumer concern about bacteria and germs. .quality. market positioning is what differs from one brand to another in the mind of buyers. convincing customers to buy that offer over other by emphasizing or creating a competitive advantage that puts that specific product in a favorable light. or the place occupied in their perceptions over that product.

type of need) and image created through advertising. Senzorial. Next. sales promotions. McCormick knew that 64% of customers buy products based on how long-living and experienced the company is.. ConAgra Foods. no matter their level of salaries. culture. price. McCormick’s strategies are based on several elements: Price positioning: McCormick is using it’s low prices to positionate as a cheap spice maker company. Also. an II Mangu Laura-Simona Grupa 204 There are 3 types of positioning: Functional. McCormick has gain it’s position of the oldest spice company and therefore. it knew that positioning is what the client thinks about the brand. social status. I am going to make a market research over two best known spice. The products are aiming all categories of customers. qualities of the product. It’s brands are so called „for every pocket”. level of education. it gain ed the trust of clients for whom traditional and familiar are the most important. Heinz Company. with references to their positioning strategies and marketing sistem. With a history of 110 years. no matter race. In fact. Campbell Soup Company. and Fuchs. McCormick is the biggest spice company in the world.Administrarea Afacerilor. I have identified 5 companies: ACH Foods.makers in the world: McCormick and Co. McCormick has the lowest prices on the international market for all types of clients. Emotional. The first one is the main competitor due to it’s large number of sales and profit. The company understood that the customer’s perception is a combination between reality ( the attributes. with more than 250 brands with high popularity and strong tradition among americans. . To identity McCormick’s main competitor I focused on looking out for companies with an international focus that occuppy the same shelf space of McCormick’s main customers. PR. Sara Lee Corp.

Mc Cormick operates in two business segments: consumer and industrial. McCormick sold 100.79 Quantity positioning: McCormick is oriented in selling big quantities of spices in over 100 countries around the world. an II Mangu Laura-Simona Grupa 204 A short comparation of prices of the best sold products: Product name Brack pepper Chili powder Paprika powder Mustard McCormick $ 11. . wholesalers and distributors. In 2011.Administrarea Afacerilor. The Company's products are sold directly to customers and also through brokers. Poland) McCormick uses selective distribution which means that products are available for selling only in few stores located near popular areas.67 $9. produced in large quantities.53 ACH $11. The strategy is high intensity of distribution because we are refering to spices. The main marketing channels used are: retailing inside/ outside stores.14 $11. Distribution channels positioning: McCormick has always been preocupied in expansion it’s distribution channels.99 $12. because they contribute to higher earnings.50 $12. This kind of positioning alows the company to focus on large scale productions in order to reach every customer in every corner of the globe.79 $9. wholesailing. In some countries ( ex. 000 metric tons of basmati rice in India and Thailand.30 $12.

Inevitably. but how about social positioning? How do people see McCormick products? Because of the history background. starting the moment of acquisition by the customer. powerfull flavour and taste. flavour in order to meet the needs and expectations related to feelings and stimulation.Administrarea Afacerilor. an II Mangu Laura-Simona Grupa 204 As a resuls of my research over this giant company. In McCormick’s case. Organic Cinnamon. I came to the result that the types of positioning used are emotional and senzorial. they teach they children and grandchildren to use the same products. thus creating a culture that ensures the company’s success for generations. Few examples of organic products: Organic Bay Leaves. spices that enrich the taste of food cause strong sensations to the main sense organs. . Emotional positioning uses McCormick’s brand images. The category that fits best with this type of positioning is represented by the organic spices which customers identity with health and proper life style. Senzorial positioning is based on sensory experiences resulting from specific brand attributes such as taste. Organic Cloves. Organic Coriander. Organic Black Peppercorns. the visual stimulation is mostly meet. By definition. Although it’s popularity is not very big. old population is the main client for McCormick brand. being possible because of the bright colours. Mass media and publicity The information stated so far described the market positioning. it address to the specific public interested in bio-food.

as the most trusted spice company in Europe. It has been awarded by Trusted Brands in 2012. but in the oposite way. while Kotanyi ( the main competitor on the european market) is selling the same product for $ 2.the german leader in the european spice market Fuchs company is no 1’s Europe spice producer and the 2nd in the world. Like McCormick itself. For example. Fuchs is using price positioning. We meet again the distribution channels positioning.20/ per 175 g. Fuchs. . Both campaigns positioned McCormick as a company who cares about it’s clients. the person with the most check-ins at his/her grill gets the honorary title of mayor of Hunt valley.99. The company is originated from Germany and it’s expansion was so big and it’s social impact so powerfull that today. The participants had to check in using FourSquare technology on the grilling done by other people. their preferences and dreams and of course. an II Mangu Laura-Simona Grupa 204 The most specific madia campaigns.Administrarea Afacerilor. in Times Square. in this case the spices with the highest quality. also wholesaling to main distributors ( Lidl. with big impact over people and social opinion was the campaign „ Grill Mayor”. It is promoting premium products with higher prices than others. but also with high quality. Another campaign that envolved technology was spotted in New York City and included a billboard interaction with fans from Twitted. 100% natural. Maryland for one day. At the and. it is the no1 choice of spice lovers.) As type of positioning on the market . Fuchs is using functional positioning. The client evaluates the performances of the product. as a top organisation that uses advanced technology and it is continously developing in this technical area. Fuchs is practicing retailing mostly. Carrefour etc. Fuchs Grill condiments is sold for $ 3. with no conservants. that rewarded McCormick with the Best social Locationbased campaign.

attracting customers and gaining their loyality. But the following media campaigns were succesfull. for medium to high prices. sais Fuchs Research Department. an II Mangu Laura-Simona Grupa 204 Sensorial positioning has the same functions as it does to McCormick. 60 % of the customers choose spice products based on those elements. Fuchs used local celebrities to promote their Cosmin brand in a TV commercial. Fuchs is an important supporter of Andreea Marin’s „ Cherish Life Foundation”. Mass media and publicity: Fuchs failed to positionate properly at it’s first media campaign. Based on a research. I personaly believe that the two came in a direct relation. appreciated woman with a solid background carrer and knowlegde about advertising.Administrarea Afacerilor. The management department agreed to position the brand on the shelf with other cheap products and therefore. Also. Best selling products are those with stronger flavour and colour: Fuchs Black Pepper. A very important part of positioning is finding the right logo! Some say that a company’s logo is the element with a bigger impact than the product itself. easy accessible brand. the public’s impression. In Romania. taste.that it cares about social problems and the people in need. Communication to public was also poor. flavour. This creates a positive image for the company. a strong. She associated her image with the spice company’s brand. there were no banners in public places or other information support about the campaign. Mix for hungarian gulas. So all the possible clients came to the conclusion that Fuchs is cheap. and the trust in it came almost instantly from the clients. is that Fuchs provides low/average quality products. one cannot create an identity without the other. more than 70 % of customers associate the product with a specific sentence and it is more probably to buy a certain product remembering it’s logo. This was an example of ineffective positioning and misleading on the market. We are talking about Andreea Marin. when the reality is different: Fuchs promises high standards of products manufactured with a speciaal taste. they led to increasing profit. that exists even today. It creates a certain addiction to smell. Spicy mix for american barbeque and Mustard. .

rather than quantity of future sales. While McCormick emphasizes larger mass of consumers. an II Mangu Laura-Simona Grupa 204 The two companies use strong logos. 100 years a strong name that is deeply implemented in the consciousness of the american population. McCormick is twice bigger than the next competitor.SWOT Analyses Strengths: 1. considering the partnership relations with them. The only aspect that can be considered a minus is that the company doesn’t produce a line of bio or organic spices for this constantly extended domain. McCormick has build in aprox. McCormick has been officialy recognized as the world’s biggest spice producer and manufacturer. . their official logo „. key words in order to „conquer” a place in every coustomer’s mind.Administrarea Afacerilor.. This is a reason why every food –sector organisation should provide a such department. Weaknesses: 1. other brands around the globe. This can be interpreted as following: the company aims well educated potential coustomers and hopes to atract medium classes of society. but yet with the official logo. It is the oldest spice and flavour. In 2012. On the other hand. to convince people with their message over the quality of their products. the organic food will take over 40 % of the market. low class citizens can.. Mc Cormick has a very mind-keeping logo which states „ Brings passion to flavour” or „World of flavours”. Fuchs’s most important aspect is the quality of his products. and add just a little more Fuchs”. It is predicted that by the end of 2015.  McCormick. as the numbers show it. It has the largest income as McCormick ensure it’s gains from selling it’s own brands and also. the second one corresponds to social campaigns where loyal coustomers have the chance to get contact with the company itself. the first choice in traditional american thinking. of course became coustomers. ACH Foods' Spice Islands so the competition is not a treath for it’s no 1 position in this slow-growing industry. Fuchs Company adds after the imposing „ Spice & Flavouring Technology” . in order to mentain it’s position on the market and the customer’s interest. 2.maker company from USA territory and by that.

00% 2009 2010 2011 2012 1st trim 2nd trim By studiyng the diagram.00% 2.00% 5. 2. Growing popularity of the Asian. 3. traditional store-brand products. than McCormick holds 15 % of it. which means is one of the small number of companies that raise their dividends every year.Administrarea Afacerilor. attracting more customers and of course.00% 3. If we imagine their domain as a pie. which means a very small part of this category of customers buyes McCormick’s products. Because of the big investments. Japanese and Indian spices among americans offers the opportunity of developing business in this area of oriental cuisine. The first threat is considered to be the growth of small. growing profit numbers. as the next diagram shows: 6. we can see that McCormick is constantly growing from the past 4 years because pf the good management strategy and leading. Threats: 1. . for at least 25 years.00% 4.00% 0.00% 1. McCormick’s sales grew up massively over the years. Investments play an important part in positioning process because it shows the people that McCormick is a big brand that takes risks in adding a variety of other products in it’s portofolio in order to satisfy every one’s requests. Future investments to make in other countries where the McCormick brand is not yet very well known. an II Mangu Laura-Simona Grupa 204 Opportunities: 1. International expansion is McCormick’s goal for the next 4 years. in which it wants to cover over 20% of the emergent markets. McCormick company is a Dividend Aristrocrat.

SWOT Analyses Strengths: 1. McCormick intends to add 12 toppings and cake mixes to it’s dessert portofolio. type of products that McCormick is not yet focused on.Administrarea Afacerilor. Their latest tests over the customers preferences revealed that is it a strong need of new flavours and supplimentary tastes. store-brand products McCormick 15% . and this is what ensures the company’s long term succes. it is obvious that the tradition of McCromick has a plus. Mixing smoked paprika and tuscan beef stew flavouring might catch interest on the USA market. Based on the above SWOT analyses.Of couse. most of it’s customers are used with familiar spice products. 2. an II Mangu Laura-Simona Grupa 204 Distribution of percentage. Other brands 85% The customers usualy buy store-brand products because they are cheaper and easy to acces.  Fuchs. Over the other continents. But let’s have a look over their future goals: they intend in adding new types of products and „attack” the market by making them a „first”. It’s no 1 position on the European market. I believe McCormick should head in focusing on the Asian competition and the brand-stores products that are taking more and more advantage on the market. 1st choice of East-European people and 2nd largest spices producer in the world. Customers have an easy tendancy in the present days for oriental spices and exotic recepees. .

Fuchs premium products will be high appreciated in the orient for their quality. Other Fuchs Fuchs Kotanyi Other Kotanyi 2. with a market share of 48 %. more expensive than the income of the target consumers. . followed by austrian Kotanyi 30% and other producers 22%. people tend to associate them with cheap . the only one in East Europe) where they test customers reaction. 4. Powerfull media campaigns using local celebrities to acceptuate mass credibility. Weaknesses: 1. the possible success of inovated products on the market. Growing market. Fuchs spices are in average. an II Mangu Laura-Simona Grupa 204 Fuchs is known as the „biggest player” on the european field. middle class spices. Large number of competitors. Evan though Fuchs are premium products.Administrarea Afacerilor. 5. the spices market is the only one not affected by the financial crisis. 3. The possibility of entering on the asian market. 2. Opportunities: 1. It carries it’s own line of packaged organic spices and herbs. Non-orientation over the poor population. with a 5% rise in 2012. Underestimation of the Fuchs products from it’s customers. Threats: 1. Growing sales of cheap brands such as Kotanyi. 6. what they prefer and of course. Strong promoting of the consistency in flavour. 2. It is owning research laboratories ( one of them spotted in Romania.

although they focus on the same market ( spice manufacturing). As the above analyses shows. their growing profit will increase the popularity and success of the two firms. they never created difficulties to one another in the process of competition.Administrarea Afacerilor. understand the customer and his need and also predict future movements of other products on the same market niche. This is because the spice market is in continuous expansion and the only direction it can go is up. In my opinion. in which the consistency of actions and dedication have priority. . positioning and management strategies. they target the same types of consumers. an II Mangu Laura-Simona Grupa 204 Conclusion: The two companies. both should maintain their curent marketing. understand the market in which it operates.