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Issue #3: Ingredient Shortage/Risk Management

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Issue #3: Ingredient Shortage/Risk Management

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Due to high levels of frost and bad weather, majority of the worlds hazelnut crops have been wiped out. The bad weather experienced in Turkey wiped out 70% of the years hazelnut crop, and prices have soared since.

Nutella sources its hazelnuts from Turkish supplier ‘Oltan Group’, in order to support the corporate social responsibility engagement of sustainable agricultural practices.

(Achilles.com, n.d.)

With Turkey producing over 70% of the world’s hazelnuts, the plague of hailstorms and frosts have pushed up the highest its been in 10 years. Nutella uses 25 percent of the world’s hazelnut supplies, putting over 50 hazelnuts in each jar.

(Feldman, 2014)

Recommendations –

Nutella should have an ‘emergency plan’ in place in regards to shortage of supplies and the inevitable occurrences from climate change. This can be done through supplier diversification, so that when an issue occurs with one supplier, there is another supplier there for back-up.

In order to do this and ensure business is available, Nutella should use two suppliers in different amounts. For example, 75% of their hazelnut supply would come from Oltan Group, and the remaining 25% from another supplier, with relevant warning if they require more than the proposed amount from one of the suppliers.

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(Nutella Commercial, 2011)

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(www.nutella.com.au, 2014)

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"The most important consideration in reinforcing brands is consistency in the nature and amount of marketing support the brand receives"

Like many leading brands, strategic positioning is kept uniform over periods of time by the retention of key elements of the marketing program and preservation of brand meaning. In order for the brand to remain relevant and consistent, marketers should be aware of the elements or marketing appeals within old advertisements have enduring meaning with the older consumers, but are also relevant to the younger consumers.

(textbook)

Nutella remains consistent with being one of the world's leading brands for chocolate/hazelnut spreads, but they remain to promote it as purely a breakfast for toast or similar items. Consumers are the ones promoting the different uses of the product, creating the appeal to older consumers and those that follow it through with age.

Mainly targeted at younger consumers, Nutella autonomously preserves and defends the brand meaning/equity that already exists, without leaving room for further expansion of the product for older consumers and those that what to use it for something other then a spread for bread.

Recommendations -

In order for consumers to remain loyal to the brand of Nutella, the company should promote the item themselves for uses that may be of interest to different ages. This could be done through media advertising or on their social networking pages. Nutella could promote recipes and ideas that are of interest to older generations, as well as those of the younger generations.

Nutella could also promote the item as useful for times other than breakfast.

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Issue #1: Loss of social networking control

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Issue #1: Loss of social networking control

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With the introduction and overpowering of consumer use of social media platforms such as Facebook and Twitter, some of the marketing power organisations hold is being reduced and taken away by consumers of their products.

“Brand managers have lost the power to control the perception of their products” through the use of advertising campaigns. Social media platforms are primarily used for conversation amongst consumers, therefore allowing them to take charge of public discussions about brands, where inevitably marketers try to take part with.

The shift from marketers to consumers has created a form of “open source branding” where consumers not only discuss branded content; they also help to create it.

(Nobel, 2014)

The issue of social networking becoming out of control because consumers are implementing “open source branding” is evident within the Nutella brand in regards to the ‘unofficial’ world Nutella day created by consumer Sara Rosso, an American blogger living in Italy. Founding the ‘World Nutella Day’ celebrations in 2007, which were to take place every year on the 5th of February. Collecting more then 40,000 facebook fans and 7,000 twitter followers, the unofficial promotion of Nutella hosts a year-round website hosting recipes and fan stories.

Nutella maker Ferrero, issued a cease and desist notice upon Sara Rosso in regards to the unofficial “world Nutella day” website and social media accounts. Many online community advocates believe that move by Ferrero will result in a loss of consumers as it demonstrates them being “out of touch”.

(O'Reilley, 2013)
Recommendation - With numerous accounts of fan webpages, social media accounts, blogs and 'opinion pieces', the control of social media from a marketing perspective is virtually impossible. Instead of ordering cease and desist notices, or 'shunning' consumers produced pages, Nutella could follow through with similar efforts to that of Coca-Cola. The Coca-Cola Facebook fan page was actually set up 'unofficially' by two fans. The brand then took guardianship over the Facebook page - although the original creators still have involvement and have been invited for meetings and a tour of the company’s HQ.
(O'Reilley, 2013)

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(Barenghi, 2013)

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REALISTIC DRAWING: the only Nutella that doesn't disappear the blink of an eye 😆

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The iconic Nutella jars are made from Polyethylene Terephthalate (PET) and can be easily disposed of through council recycling schemes.

The Nutella jars are transported throughout Australia in cardboard cartons that are made from recycled materials. The organic waste produced is reused as animal feed and the wasted vegetable oil is reused as biodiesel.

(www.nutella.com.au, 2014)

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1978 proudly saw the introduction of Nutella within the Australian market.

Nutella is the third largest selling brand of spread and is now made and distributed

from Lithgow, NSW, for the Australian market.

(www.nutella.com.au, 2014)

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(Pietro Ferrero, n.d.)

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Created in the 1940s by Mr. Pietro Ferrero, founder of the Ferrero company,

the original Nutella consisted of mixed toasted hazelnuts with cocoa butter & vegetable oils, creating 'Pasta Gianduja'.

1949 saw the introduction of an altered recipe, then known as 'Supercrema Gianduja', as it was easily spreadable.

The product was renamed in 1964 to Nutella in recognition of the international appeal to the unique hazelnut taste.

(www.nutella.com.au, 2014)

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Nutella is a world wide favourite spread, manufactured by the Italian company, Ferrero.

Distributed within over 75 countries around the globe, Nutella is a favourite to many and is the number one spread in Europe.

(www.nutella.com.au, 2014)

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(New York Daily News, 2014)