Godiva Europe

OVERVIEW

In 1974, Godiva was acquired by multinational Campbell Soup Company. Godiva International is made up of three decision centers: Godiva Europe, Godiva USA, and Godiva Japan. Godvia European is headquartered in Brussels, Belgium. The companyÐŽ¦s factory is also situated in Brussels, from where products are exported to more than 20 countries throughout the world, including Japan. There is another production unit in United Sates, which can provide about 90 percent of the needs of the U.S market, with the remainder being imported from Belgium.

Godiva European launched the CorneÐŽ¦ Toison dÐŽ¦Or brand. The original purpose that Godiva European acquired the Corne Toison dÐŽ¦Or brand is to differentiate the positioning of the brand CorneÐŽ¦ Toison dÐŽ¦Or brand. Godiva Japan is solely concerned with marketing, distribution, and sales of Godiva chocolates and imports the product from Belgium.

Prior to 1991, Godiva European experienced a loss of $10 millions, said by Charles van der Veken, President of Godiva European. Because of the changes of decoration and design of the remaining stores and established precise rules of organization and functioning applicable to those stores, these changes led Godiva transform a loss of 10 million francs to a profit of $13 million francs in 1991. Charles van der Veken is faced with the evaluation of advertising strategy.

STRATEGIC ISSUES AND PROBLEMS

1.Should Godiva allocate $13 million Belgian francs to a saturated European market or apply the $13 million for the international market?

2. Is it possible for Charles van der Veken to create a common advertising message for the entire world?

SWOP ANALYSIS

1. Strengths:

a. A integration into multinational Compbell Soup Company for global expansion.

b. A antique and high quality of brand image internationally

c. A handmade and delicate flavor of chocolate pralines with luxurious packaging

2. Weaknesses:

a. The great fluctuation of seasonality of consumption among countries may expose the problem of the planning of production and profitability.

b. The great disparity between the Godiva boutiques in different countries degraded GodivaÐŽ¦s brand image, mainly in European and even more particularly in Belgium.

c. The Godiva brand image has aged.

3. Opportunities:

a. The well performance with worldwide consumption of confectionery chocolate Customers pay attention to brand names and to the quality image communicated by chocolate packaging and advertising.

b. The transformation of purchase behavior from the wealthy to a mass-consumption product.

c. In Spain and Portugal, CustomersÐŽ¦ attitudes toward chocolate are very positive.

d. In Belgium,Customer prefers a package where he or she may select the assortment.

e. In Belgium, Chocolates are functioned as a gifts not as self-consumption.

4. Threats

There are mainly three competitors in European market: Neuhaus, Corne, and LÐŽ¦eonidas.

a. There is not any clearly difference of brand images among Neuhaus, Corne,and Godiva.

b. Compared with LÐŽ¦epmodasÐŽ¦s market share of 43 percent, Godiva just holds 10 percent of the market share in Belgium.

c. In France, The LÐŽ¦eonidas holds the largest market share and sells through 250 boutiques. Godiva and several French chocolatiers are occupied a small share.

d. British are more conservative and economic climate is not very favorable for a luxury product.

e. In Germany, a ÐŽ§chocolates cultureЎЁ does not really exist. Germany appears to be satisfied with a classic chocolate bay and does not yet place much importance on the distinctive qualities of fine chocolates.

INSIGHTS ROM THE GODIVA EUROPE COMPANY

a. CustomersÐŽ¦ preference is difference among countries. The France prefers drier and bitter chocolates.

b. There is difference of consumption habits among countries.

c. The market in Belgium is too saturated.

d. It is difficult to create a common advertising message for the entire world.

e. Godiva was swamped with an indecisive condition between automation and handwork chocolates. The investment in handmade chocolates didnÐŽ¦t reflect in increased quantities required by customers.

f. There are great growths of consumption in these countries of Italy, Japan, the United Kingdom, and the United States.

g. After Godiva standardized his price in terms of unified European Union in 1993, the result of a 10 percent price increase led to a loss in volume of about 7 percent and the lost volume went to LeoniaÐŽ¦s for the most part.

h. In term of the problem of great disparity between the Godiva boutiques in different countries and aged GodivaÐŽ¦s brand images, the Godiva built the franchising contract by asking GodivaÐŽ¦s franchisees to adopt the completed renovation.

PLAN OF ACTION

There are two alternatives open to Godiva:

Option 1: Do nothing for both of European markets and international markets

Option 2: Doing nothing for European market and focusing on international markets such as Japan and United States with high growth potential

Option 3: Carrying out GodivaÐŽ¦s European campaign by developing another more youthful brand image with low pricing strategy and using this brand image to launch global market

The advantages of disadvantages of the options available to Godiva can be outlined as follows:

Option 1: Doing nothing

Advantages:

Because Godiva has built well-known brand image globally, Godiva doesnÐŽ¦t