Download to View - elements

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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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 reorienting marketing activities to appeal to this target audience.