Page 1: Introduction
United Biscuits (UB) is an international foods business operating in 24 countries. The company manufactures, markets and distributes biscuits, savoury snacks and frozen and chilled foods, has leading market positions in the UK and Continental Europe and is building its presence in Asia. UB has 46 manufacturing sites world-wide and its products are available in over 90 countries.
UB's brands include household names in all its product categories and the company is also a major producer of own-label products in the UK. In the UK, UB owns McVitie's, KP, McVitie's Prepared Foods and Youngs, manufacturing well-known brands such as McVitie's Digestive, McVitie's Rich Tea, Jaffa Cakes, Go Ahead, Hobnobs, Penguin, Hula Hoops, Skips, McCoy's, KP Nuts, San Marco pizzas, McVitie's desserts, the Ross Chip Shop range and Linda McCartney's meat-free products. McVitie's Group purchased BN (Biscuiterie Nantaise) in France during 1997 and has recently acquired Delacre.
McVitie's is the UK's leading biscuit baker, manufacturing over 60 biscuit brands, including Hobnobs and a range of traditional and continental cakes. KP is UB's savoury snacks business, consisting of four business units (Snacks, Crisps, Nuts, Derwent Valley Foods). McVitie's Prepared Foods consists of three business units - Pizzas, Desserts and Vegetarian. Youngs is UB's seafood business. UB has a flexible approach to brand development, building on strong acquired brands and existing portfolio brands as well as developing new brands capable of being used across national boundaries. The Hobnobs repositioning story is a prime example of the way in which UB nurtures and develops its existing brands to ensure that they are best placed in their respective markets.
Page 2: The importance of finding the right position in the market
This case study examines the way in which McVitie's has recently repositioned Hobnobs to target them at a younger audience of 18-34 year olds, as well as maintaining its established audience of consumers who like to treat themselves to high quality biscuits.
While reading the study, students should try to think of ways in which Hobnobs can best be promoted and advertised to catch the attention of 18-34 year olds.
Skilful marketing involves finding out exactly what consumers are looking for and then meeting their requirements. To be able to do this effectively, you need to have a clear view of exactly who your customers are so that you can target your marketing activities at the appropriate groups. Finding out about your customers and their characteristics is done through market research. The marketer can then position marketing strategies and activities to best focus on the target market.
For each category of good or service, there are a number of segments or sectors, with their own distinguishing characteristics. For example, a car is not just a car. There are sports cars, family saloons, small economical cars and many other types which are positioned in different segments of the overall car market. The diversity of sectors in a particular market is well illustrated by the biscuit market.
Page 4: An overview of the biscuit market
The biscuit market can be divided into a number of sectors. These are:
Everyday Biscuits - the reasonable quality and price of these biscuits mean they can be consumed every day, e.g. Digestive, Rich Tea, Ginger Nuts, Hobnobs original.
Everyday Treats - still considered within a price range that they can be consumed every day. These are slightly more indulgent products than Everyday Biscuits, e.g. Homewheat, Chocolate Hobnobs, Chocolate Ginger Nuts (mostly half coated or cream filled biscuits).
Special Treats - not likely to be consumed on a daily basis. Instead, it is more likely to be considered a treat and shared with friends or eaten as a small individual treat, e.g. Boasters, Bahlsen biscuits, etc.
Healthy Biscuits - offer a healthy alternative, e.g. McVitie's Go Ahead (which deliver a fat benefit) and Jacob's Vitalinea.
Biscuit Variety Packs - an assortment of biscuits in a tin or box, e.g. Victoria, Rover, All the Best assortment, Fox's Children Selection, etc. These are highly seasonal with peak sales in the run-up to Christmas.
Chocolate Biscuit Bars - this category includes all biscuits which are fully covered in chocolate and individually wrapped, e.g. Penguin, Ace, YoYo, Riva, Taxi.
Children's Biscuits - this category considers younger consumers with products such as mini Penguin, Munchmallow and other brands such as Fox's Sesame Street range, Jammie Dodgers etc.
Crackers - savoury biscuits which, on 50% of the occasions, are consumed with a third party product such as cheese or pate, e.g. Krackawheat.
Savoury Nibbles - a savoury product which is eaten alone on 50% of occasions. These products are often flavoured, e.g. Crackpots, Tuc.
Page 5: Hobnobs
In recent times, Hobnobs have been repositioned in terms of marketing focus so that they can be more effectively targeted at a buying audience of 18-34 year olds.
Hobnob variants compete in two main sectors of the biscuit market:
Hobnobs Original falls under the sector Everyday Biscuits.
Hobnobs (milk and plain chocolate) fall under the sector Everyday Treats.
Additionally, there are a number of brand extensions - Hobnob Creams, Hobnob Flapjack and Hobnob countline which are chocolate covered bars.
Page 6: Launched in the late 1980s
Once consumers become familiar with particular brands, they often begin to believe that they have been in the shops for a lot longer than they actually have. It is difficult to believe that Hobnobs have only been with us for just over a decade. Hobnobs (original) were launched in 1986, closely followed by the two chocolate Hobnob variants in 1988.
Following the highly successful launch of the original biscuits, McVitie's decided to build on the strength of the brand. The famous Hobnob name was then extended to Hobnob bars (a new countline) in 1989. Hobnob Creams were launched in 1992 and much more recently, Hobnob Flapjacks in April 1997.
Page 7: Why reposition a brand?
The market-place is dynamic - it changes continually. Skilful marketing involves being aware of the changes that are taking place and making sure that your brand is best positioned to benefit from opportunities.
Originally, Hobnobs were positioned to take advantage of their 'homebaked taste' where the appeal of the biscuit was its oaty, crumbly, wholesomeness. This approach to marketing Hobnobs meant that the biscuits proved to be particularly successful with a market that had the following characteristics.
- ABC1 - this group is generally targeted by McVitie's for its premier brands as it incorporates a number of classes who are likely to be in a position to afford the choice and luxury of branded biscuits.
- over 35 years old
- 50% male and 50% female.
This target group provided McVitie's with a healthy core of loyal customers. However, more recent research has indicated that there is a far more substantial opportunity to target the biscuits at a wider and younger audience.
Market research has revealed that Hobnobs:
- have the highest proportion of male consumers of any McVitie's biscuit
- have the highest proportion of consumers under 35 years of age
- have a high brand awareness
- do not rely heavily on McVitie's endorsement to sell the product, rather they are able to act as a stand-alone brand
- a key feature of the product is its 'nobble effect'
- sell particularly well as a complement to soft drinks.
Armed with this research information it has been a logical step to reposition McVitie's marketing activities to focus on a repositioning of Hobnobs so that the primary focus has moved:
This does not mean that the original Hobnobs market has been abandoned - clearly this needs to be built on - however, the emphasis in marketing tools and tactics will now be on the younger age group.
Page 8: Building a new marketing strategy
The new marketing strategy for Hobnobs is to target young adults in the 18-34 age range with a fun, sociable, humorous brand relevant to their lifestyle (i.e. one which involves the enjoyment of life, on the move). The brand's purpose is to bring more interest, fun and entertainment to the biscuit market and to provide a relevant offering for younger adults, who make up the post-teenage and pre-traditional biscuit consumer.
Biscuit buying can be seen as following a life cycle pattern for consumers.
- Children and teenagers
- Post-teenage young adults enjoying fun lifestyles
- Established family buyers
- Older age group
Page 9: Relaunching in 1997
The challenge facing Hobnobs in relaunching the brand was to target young consumers (18-34 year olds). This was not an easy task because this group of consumers does not have static lifestyles, rather they are people who are out on the move.
The promotional mix of advertising, media selection and sampling had to be suited to this type of consumer. Issues that needed consideration included: Where would this consumer be? Are they likely to be at home watching television? Would cinema advertising be appropriate? Are they likely to be sporty? etc.
The group of consumers aged 18-34 actually incorporates a variety of people including students, young professionals, single status people and young married couples. The task in marketing Hobnobs was to reach this target audience effectively. Research indicated that this group of people score particularly highly against cinema, radio and satellite television.
The delivery of the correct media in the correct place is essential to the success of the campaign to re-vitalise the Hobnobs brand by appealing to a younger consumer profile.
The challenge was to find the most effective way to reach this target audience and ensure that the Hobnobs message is conveyed to them clearly amongst the clutter of other messages with which they are faced.
Sampling venues (i.e. locations at which potential consumers have the opportunity to taste and try the biscuits) would also need to be tailored to ensure that the locations are relevant to the desired consumer, e.g. sporting events, student unions, etc.
Hobnobs were relaunched in 1997 with the intention of repositioning the brand away from its 'homebaked taste' and to its new position of 'Irrepressible Nobbly Adventure'. The brand essence was to be seen as 'surprisingly and irresistibly entertaining'. The relaunch included a new pack design, on pack promotion and radio support.
Hobnobs respond very well to promotional activity (especially off shelf display). The campaign 'Talking Nobblers' with Vic Reeves generated increased sales. The promotion was presented on-pack with an instant 'ring and win' campaign which ran across Hobnobs Original, Chocolate, Bars and the newly launched Flapjacks. It offered consumers the chance to win one of three prizes of £25,000, a limited edition T-shirt or mug.
Page 10: Hobnobs on the up …
There can be no doubt that Hobnobs are perceived by consumers as being a lively and interesting brand with a distinctive image. McVitie's therefore needs to build on the strength of the brand and make sure that the right sort of messages about the product are reaching a target audience of young adults with a sense of fun.
In creating an effective marketing strategy, marketers working for McVitie's have set out to:
- use the strength of the brand name to reach the target market effectively via links with comedy and humour
- encourage sampling at events relevant to the target market to encourage trial and (ultimately) adoption
- appeal to a young target market without alienating the current broad user base (housewives)
- reach the target audience through appropriate media (cinema, radio, satellite, TV, magazines)
- use PR/sponsorship as a cost effective vehicle to increase awareness and develop brand personality.
Page 11: Hobnob trials
McVitie's recognises that it is essential to generate trial as a tool to re-introduce the brand to many lapsed users. The best way of making sure that customers buy your product is to acquaint them with the product. With so many biscuits on sale in retail outlets, it is likely that a large number of potential customers have never actually tried all the Hobnob variants. This is particularly relevant for the brand because the actual quality of the product has been shown, by market research, to be greater than the perceived quality of the product. In other words, many consumers who tested Hobnobs as part of a market research trialling exercise found that they enjoyed the biscuits more than they thought they would. It therefore makes sense to encourage as many potential customers as possible to try Hobnobs.
Another potential strength of Hobnobs is that they sell through a wide variety of distribution outlets. Hobnobs have strong distribution in the multiples, i.e. supermarkets and grocers, However, unlike many other McVitie's brands, 50% of Hobnob sales are accredited to the Convenience and Impulse (C & I) sector. The C&I sector broadly incorporates everything which is not a multiple grocer i.e. this includes CTNs (Confectionery, Tobacconist, Newsagent), Independent Grocers and Petrol Station Forecourts.
Page 12: Conclusion
This case study has outlined the way in which McVitie's set out to relaunch a premium brand, Hobnobs, to appeal to a younger target audience. The tasks and activities encourage you to consider effective ways of re-orienting marketing activities to appeal to this target audience.
United Biscuits | The repositioning of Hobnobs