Peeps® in China

Erin Smutz, Stacy Reppond and Shatika Rembert

Final Project Phase 1: Situation Analysis

October 4, 2017

Peeps® 4P’s AnalysisProduct

Core● Hunger satisfaction

● Sweet/sugar fix

● Happiness

● Sharing and celebration

Actual● Sugar-covered

marshmallow candy

● Unique shapes, colors, and flavors

● Bright, fun packaging and logo

Augmented● Promise of quality

and satisfaction

● Customer service website and phone number

Peeps® 4P’s AnalysisPrice Place Promotion

● $1–$3 in stores and online (4–12 pieces)

● $24 online for 24-count case (5 pieces per tray)

● Direct Store Delivery

○ Supermarkets,

convenience stores, chain

drug stores, and general

retail stores

○ Easy to locate

● Peeps® & Company retail stores

● Online

○ Peeps® candy store

○ Third-party retailers

(Amazon)

● Always in Season™ and Express Your Peepsonality®

● Social Media

○ #VotePeeps

campaign for

Groundhog Day

● TV advertising

● In-store sales promotions (buy one, get one free)

● Annual Peepsfest®

U.S. Industry Analysis

Candy Production

● “Confectionery such as breakfast bars, candied fruits, fudge, Halvah, marshmallows, and toffee” (IBISWorld, 2017a, p. 2)

○ Chocolate not included

● By 2020, $38.1 billion in sales

○ Revenue: $8.2 billion

○ Exports: $640.5 million

● Declining sales

○ Health concerns

○ Heightened competition

● Considered moderately globalized

Global Market Industry Analysis

Chocolate & Candy Production

● Chocolate included in Chinese industry

● Expected growth: 5% by 2020

○ Disposable income

○ Interest in Western-style sweets

● Revenue: $25 billion

● Most of the market demand met by domestic production facilities due to nature of product

Global Market Competition AnalysisProduct Price Place Promotion

Hsu Fu Chi International Ltd. (joint venture with Nestlé)

Peanut candies, marshmallow candies, chocolate, cakes, jellies, cookies, sachima, cereal-based snacks, and wafers.

$5–20 [in US$]

depending on which website you purchase from.

Brick-and-mortar stores (supermarkets and hypermarkets).

Themes for different product types and event-centered branding.

Depends on Nestlé’s power for public relations/advertising.

Yake (China) Co., Ltd.

Milk candies, marshmallow candies, chocolate, gum, mints, vitamins, jellies, and toffee.

$5-25 [in US$] on

the company’s website.

Brick-and-mortar stores (only supermarkets); online (company’s website).

Emphasizes its distinguishable packaging .

More traditional (print) than digital advertising.

Shanghai Guan Sheng Yuan Food, Ltd.

Non-chocolate candies (or sugar confections), bee products, wheat products, seasonings, and wine.

$5-40 [in US$]

depending on which website you purchase from.

Brick-and-mortar stores (supermarkets, general retail stores); online (company’s website).

Markets White Rabbit candy.

Traditional and digital advertising.

Perfetti Van Melle Confectionery China Co. Ltd.

Non-chocolate candies (or sugar confections), gum, and dental health products.

$0.50– $5 [in US$]

Brick-and-mortar stores (supermarkets, hypermarkets, general retail stores); online (company’s website).

Different ads for brands.

Uses brands as icons with distinguishable packaging.

Traditional and digital advertising.

Country Overview

● Large potential customer base despite stationary growth

● Less expensive distribution channels due to population density

● Incorporate Mandarin into advertising and package design

● More mature, affluent consumers over the next decade

Country Overview

● Industrializing nation with growing middle class

● Product price point makes it marketable to lower- and middle-class households

● Growing urbanization rate will impact the market

● Wealthiest cities (by GDP): Shanghai and Beijing

Country Overview

● Investigate specific temperature controls for product packaging and distribution

● Eastern China, including Shanghai and Beijing, is more ideal for mapping distribution channels

Country Overview

● High import taxes and customs duty (food =10%)

● Majority of digital ad spending on mobile

● Strict regulations for traditional and digital advertising

● Many Western social networking sites (SNS) blocked by government

Cultural Overview

ChinaU.S.

Individualism

Low-context

Short-term orientation

Language based on phonetics

Holidays

Family

Gift-giving

Celebrity influence

Visual and performing arts

Pride in national symbols

Collectivism

High-context

Color and number significance

Long-term orientation

Language based on pictures

SWOT Analysis: Peeps®

Strengths● Associated with holidays and family

● Low price

● Sold most places

● Utility for arts and crafts

Weaknesses● Lacks product versatility

● Limited marketing approach (social media)

● Language barrier/ translation issues

● High competition

Opportunities● Growing demand for Westernized sweets

● Shift toward confectionery products

● Potential to connect as cultural symbol

● Gift-giving cultural aspect

Threats● High tariffs and import costs

● Strict media laws and regulations

● Diverse climate requires temperature controls

● Competitor partnership with Nestlé

Questions?

References

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