CoP Reuter LR CrR CL Td Gosia choca, » exgium choca manufactur renowned for its premium quality handcrafted chocolates, was founded in 1926 in Brussels by the master chocolatier Joseph Draps. The company makes and sells premium chocolate delights including bonbons, truffles, flavored coffee, cocoa mixes, cookies, ice cream, and liqueurs. Godiva has always been an admired brand with an upscale appeal in the market supported by its golden boxes.” A the success of Godiva grew in Belgium, it started to expand into international markets by opening exclusive Godiva stores in Pars, France, in 1958, followed by the United Kingdom, Germany, Italy, and many more European counties. The Godiva brand then expanded to North America in 1966 as an importer and distributor of Godiva chocolates from Belgium in one of the most elegant depart- ment stores in Philadelphia, The frst Godiva store was opened on New York’ Fifth Avenue in 1972. The expansion then continued in ‘Asia by the opening of a corner shop at one of the prestigious department stores in Tokyo in 1972. In 1988, the fist Godiva store was opened in Hong Kong, followed by store openings in Taiwan and Singapore. Presently, Godiva's products are available worldwide in over 80 countries around the world, at 450 exclusive Godiva stores as well as at finer department and specialty stores. The company also issues mail-order catalogs in North America and accepts phone and Internet orders. In 1967, New Jersey-based Campbell Soup Company acquired Godiva Chocolatier and invested heavily to tur it into a worldwide renowned brand. However, in August 2007, Campbell Soup Godiva Chocolatier 2 Belgium chocolate maker, operates 450 shops worldwide and their products are available in over 10,000 other retail ers. The business, founded in 1926, is now owned by a major Turkish ‘company, despite the fact that many ofthe largest and best-known confectionery and food manufacturers in the world were bidding to purchase Godiva. Ulker, the new owners,began asa small biscuit baker in 1944; they now sell over 700 products under 132 brand names. In Turkey Ulker has 60 percent of the chocolate market. Source: © Jefvey Blackler/Alamy 362 Company announced that it was looking for strategic alternatives ‘or its Godiva business. The company decided to sell Godiva whe a strategic review reported that luxuries like chocolates we"= strategically unfit for the Campbell Soup Company, which focusing on simple meals and engaging in mass-market produc: The company decided to focus more on its traditional business soups, baked snacks, and vegetable-based beverages, which increasingly being marketed as part of a healthy lifestyle, to wh = chocolate did not fit. Major international food giants and conglomerates such Hershey, Mars, Nestlé, and Lindt made bids for Godiva. December 20, 2007, Campbell announced that it entered into = agreement to sell Godiva to Ulker Group, one of the larg consumer goods companies in the Turkish food industry. acquisition was completed on March 18, 2008, and Godiva officially sold to Yildiz Holding, the owner of Ulker Group, $850 milion, The 61-year-old Uiker Group is a conglomerate of» ing a wide assortment of biscuits, cookies, chocolates, con’ tioneries, beverages, and dairies to its customers. Uker Group a solid position in the local food market with its high profitabi = strong financial metrics, and adequate liquidity position, The co~ pany is reported to be the market leader in the Turkish choco industry, holding a market share of 60 percent in 2008, The acquisition of Godiva is a definite achievement for O Group and represents a strategic fit with Ukker Group's portfo = This business deal is expected to help the company to diversify = product offerings by entering the premium-tuxury chocolate ma and is in line with its business strategies of expanding vertic= through mergers and acquisitions rather than growing horizor ‘The company aims to postion its brand image through an inte tional name in the regional and global markets. Ulkers Bis. Chocolate and Cake Division President Ali Uker also reported the purchase of the world-renowned Godiva brand was a toward the company becoming a regional power. The compe already dominates the Turkish market and exports its products ir nationally to 95 countries; it has strong roots and brand presence + the Middle East and Turkish Republics. The Godiva takeover «ul allow Ulker Group to enter into the global markets and tak serious step in its attempt to be a global company. Besides, this =3 is being viewed as a success story for the Turkish economy $850 milion is the largest amount of money a Turkish firm has paid in acquisition ofa foreign firm Godiva Gems: A “Little” Taste of Godiva Anytime, Anywhere The acquisition has worked out wel, and Godiva has grown ir $500 million business with upscale products sold at more: 10,400 stores around the world. In fall 2009, the chocoie decided to go mass market and introduced a lower-pricec “€ named "Godiva Gems," intended to help consumers perceive “é premium Godiva brand as more affordable or accessible. Gers marketed as ideal for enjoying a “ittle taste of Godiva choc anytime and anywhere." Perfect for the consumers who apor the highest quality chocolate at an affordable price, the launc’Godiva Gems is defined as 2 groundbreaking moment in the world’ leading premium chocolate producers history. Godiva Gems are individually wrapped packages of smaller pieces of chocolates so that they can be shared. The collection features three varieties: Solid Gems, Caramel Gems, and Truffle Gems, all are available in rich milk or dark chocolate. Made with the finest cocoa and in keeping with Godiva's Belgian heritage, Solid Gems are a treat for any chocolate lover, Caramel Gems are soft chewy centers of caramel enrobed in chocolate, and Truffle Gems feature a smooth filing crafted in the tradition of Godiva's world-renowned truffles. Godiva Gems are available in packages containing a single variety of truffles, caramels, or solids Consumers can purchase Gems bags for as low as $4.99 for a range of 12 to 18 chocolates or $9.99 for a bag of 20 to 29 chaco- ates. These products are offered for sale in Godiva stores, news- stands, duty-free shops, and select premium grocers like Safeway, Publix, and Wegmans, making it possible for consumers to easily obtain these chocolates. ‘Although one may question whether these Gems may dam- age Godiva's premium chocolate brand image, this attempt is actually seen as an excellent adaptation of the chocolatier to the shallenges in the marketing environment. Jim Goldman, presi- dent and CEO of Godiva Chocolatier Worldwide, states that Sodiva Chocolatier has been known for over 80 years as the eader in the premium chocolate category. He also asserts that Sediva’s delicious chocolates have traditionally been packaged and sold primarily as gifts, and have been available only in exclu- sive stores and department stores. With the launch of the new Sodiva Gems, the chocolatier has broadened the availabilty and accessibility of its high-quality chocolate. This exciting move for Sodiva and its consumers is inline with the changes in the con- sumer behavior brought on by the sluggish economy. Goldman, stho has managed Godiva since 2004, also asserts that this pansion became possible only with the support of the new owner, Ulker Group. He further states that this new down- market move aims to meet the needs of today’s consumers who ~ave given up many luxury goods but are stil treating themselves th lower-priced impulse purchases like chocolates. With the sales of Godiva Gems, the company is trying to play a different sme, other than its offering of its famous gold boxes of Godiva srocolate, Already, Gems have accounted for 10 percent of sales * its 423 company stores since the early-September 2009 intro- suction. The company also forecasts that Gems will be in 2,000 _permarkets by year-end, ‘Many consumers may think that there's a risk in this new sroduct introduction decision and if Godiva's widely available ms will turn out to be as good as its golden-boxed chocolates, is could lead to cannibalization. Also, there is stil the question * whether the company is risking the Godiva brand in con- samers' minds. Goldman reported that the company is not com- zromising the quality of its chocolates, and with the introduction of Godiva Gems the company aims to appeal to more consumers who will consume just more Godiva every day. Godiva is not abandoning the high-end market either. Alongside the Gems selling on the supermarket shelves, the company also introduced “Legacy Truffles,” which retail for $54 for 20 pieces. Godiva executives also report that baked {900ds like cakes will soon be available from the company’s Web site. These new product offerings are forecasted to help double the $500 million revenue of the company by 2014. Finally, Yildiz Holding, the parent company of Godiva, continues investments to grow the Godiva brand in different markets. The company is Preparing to enter China with two store openings and is also planning to open two stores in its home country of Turkey in the beginning of 2010. Visit the Web site www.gediva.com and wwnw.godiva.com/gems Discussion Questions 1. Define "the product” offered by Godiva. Identify the different levels of the product. Discuss the attempts made by the management to come up with an augmented product. 2. Do you think that the Godiva brand could be damaged after the introduction of the new product to the lower end of the market? Do you see any risk of cannibalization ofthis line ‘extension for the existing product line? Why or why not? Discuss. 3. 1s "Godiva Gems" an international or a global product/orand? Discuss whether the brand holds global brand characterises. 4. What are the possible impacts of the "country-of-origin” and ‘packaging” in motivating consumers to purchase Godiva chocolates 5. Godiva is entering new markets lke China and Turkey. What strategy would you offer to the company in its global prod- uct planning decisions in term of standardization versus adaptation? Sources: “Campbell Soup Sells Godiva for $850 Million,” The New York Times (December 20, 2007): “New Product: ‘Godiva Chocolatier Gems (TM) Individually Wrapped Chocolates by Godiva Chocolatier, Ine.” FoodBiz Daily (August 27, 2009), www.foodbizdaily.com. Accessed November 1, 2008; ‘Stuart Elliot, “Godiva Rides in a New Direction,” The New York Times (November 16, 2009); Stkrii Andag, “Godiva 2010 basinda Nisantast ve ‘Cadde'de," Miliyer Newspaper (October 27, 2009), p.11; “Uiker in “Kasikes Elmast;” Fortune (July 1, 2008), pp. 149-152; Venessa Wong, “Godiva Goes to the Supermarket," BusinessWeek Special Report (October 14,2009); Zainab Mansoor, “Ciker Group Strikes with Belgian Chocolatier GODIVA's Acquistion—Belgian Chocolates to Resurface as Turkish Delights,” Dinar ‘Standard Ganuary 26, 2008); wow goiva.com. Accessed November 1, 2009; ww walkercomt. Accessed November 2, 2009. 363