1. Assessing the market

The market for chocolate bars is highly competitive. There are a small number of large firms in the industry - Mars, Cadbury, Nestlé and Suchard being the most well known. Many of the brands in the market have been in existence for a long time and have a high amount of brand loyalty. Openings for new products therefore are limited. There are many examples of products that have been launched and which have been withdrawn because they could not sustain long-term sales success. Can you remember the Prize Bar, Aztec and Junglies?

The market for certain types of chocolate bar has changed in recent years. The growth of the so - called 'count-line bar' (shaped like Mars bars) became popular as people ate chocolate on the go as opposed to sitting down in a room with a traditional bar of chocolate. Companies had to respond to these changes. Rowntree (now owned by Nestlé) changed the shape of their Aero bar and Cadbury brought out a rival bar called Wispa. Both of these were designed to exploit this growing market.

The market is still changing but using chocolate as a snack as opposed to sharing a bar amongst a family or giving chocolate as a gift is still a growing part of that market.

2. Identifying a gap in the market

Once the market has been analysed, it might become clear that there is a gap in the market. What this means is that there is an identifiable customer need that is not currently being met by an existing product. It could also be where a rival might have a presence and where the company concerned believes it could offer a competitive alternative.

Market research, which in many cases is on-going, will have given the business some idea of the nature of the market and the extent of the possible market. It may be that further research is used to target particular market segments that the business feels will be the ones most likely to purchase this product and what it is they want out of the product. Much of this will be used to inform the marketing mix.

Image: There are lots of people in any market but identifying who are the most likely groups to buy your product informs different aspects of marketing tactics. Copyright: José A. Warletta

3. Developing the product

Quite often businesses in this particular industry want to develop a 'brand personality'. What this means is that they will want consumers to associate something specific with the product. KitKat, for example, is associated with a 'break', making it the perfect accompaniment to a cup of tea or coffee. The personality of the product will be in line with the market research and analysis carried out. The ingredients, the look of the product, its texture when eaten, its name and packaging and how it will be promoted will all be key factors that will be informed by the development of the brand personality.

A very good example of this process is the development of Yorkie. Yorkie was developed as a contribution to the count-line bar market. It aimed to use the concept of a chunky chocolate bar but in a different format to allow it to be eaten on the go. The key thing to emphasise was the chunky nature of the chocolate and to do that Rowntree developed its early marketing around the length of time it would last and it being an ideal accompaniment for long journeys. The trucker image stuck and gave the bar a 'masculine' personality. In recent years, this has been exploited with a deliberate campaign suggesting that it is so chunky it is 'not for girls'!

Image: Yorkie - originally associated with truckers but now developed along the same masculine lines - this is a bar not for girls! Copyright: Michael Sellwood

4. Product testing

Once these stages are gone through, the product is likely to have to be tested. People may be given choices of different names or different packaging prototypes to see what consumer reaction is.

It may be that this type of problem has been resolved at an earlier stage, in which case more substantial user testing may be used by virtue of a test-market. This may be a selected region of the country where there is a profile of users that is representative of the country as a whole. Using test markets gives relatively accurate feedback but is also much cheaper than a national launch, which might not see the product doing as well as anticipated.

Remember that to feed a market, the capital investment has to be there to back it up. If the test market showed that the product was going to be very popular, the business would have to ensure that sufficient capacity was available prior to a national launch. You would certainly not want to have a product launched and people not be able to get hold of it!

Image: User testing is an important aspect of marketing strategy - it gives a good idea of the likely market reaction without incurring the costs of a national launch. Copyright: Nick Benjaminsz

5. Launch

All these stages in the development of the product will have required significant investment. The sums of money involved in developing new products can be large and of course, the hope is that once launched, the product will begin to start repaying some of that investment.

In its early stages, however, the product will need further expenditure to support it and make sure that customers know about it. For chocolate bars, the secret is to get people trying it, but to follow that up by buying it again and again and again for many years. In other words, repeat purchases are essential in a fast-moving consumer goods market.

During this early stage, managing the cash flow of the product will be important. This will mean balancing the returns of the product from sales with the on-going costs of production and marketing. If these get out of balance, the future of the product will be called into question and it may be worthwhile pulling the product before any further costs are incurred and 'cutting your losses'.

To manage the launch and development of a product, therefore, marketing tactics will really come to the fore. It will be important to keep a close link with consumers to find out what they think and also to keep the brand in their horizon amongst the competition. Sometimes this might be something simple like getting your product displayed prominently in shops so that impulse buyers select your product or customers are drawn to your product at the expense of rivals. This in turn will mean having sales people with good relationships with retailers.

Finally, maintaining cash flows in the short term will also be determined by the success of the advertising and promotional campaigns that are developed. Does the firm go for traditional TV ads along with ads in magazines and billboards or does it go for more guerrilla marketing techniques to raise awareness? Should it have an online presence - many branded products have Web sites of their own, for example?

These are all important factors to consider and the launch of the product does not mean the job is done!