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2. Agenda Introduction Social Enterprise Fair Trade Cafdirect Theories Corporate-Reputation Quotient Kano Model Product/Market Grid Case Application Learning Insights 1 3. Agenda Introduction Social Enterprise Fair Trade Cafdirect Theories Corporate-Reputation Quotient Kano Model Product/Market Grid Case Application Learning Insights 2 4. S ocial Enterprise Social enterprises social mission driven organizations which trade in goods or services for a social purpose.3 Social Enterprise Commercial business To generate profit to further their social and environmental goals To maximize shareholder value e.g. Cafdirect e.g. The Body Shop 5. S ocial Enterprise 4 6. What isCafdirect ? Cafdirect is a UK-based alternative trading organization and it is currently one of the largestfair tradehot drinks companies in the world. 5
7. Sources: see Littrell and Dickson, 1999; Mayoux,2001; Tallontire, 2001a 6 How fair trade work? Aminimum price , which always be paid even if the world market price falls below this point. Aprice premiumof a given percentage, which is paid when the world market price rises beyond the minimum price. Pre-financingof 60% of the total order to allow smallholders to buy raw materials. Trainingin quality control and marketing know-how to build the capacity to also trade on the world market independently of fair trade. 8. C afedirect
The History of Cafdirect
7 9.
Timeline (1989-1993) 8 10. Timeline (1989-1993) Increase of products qualityAt the very beginning, the company focus purely on charity rather than quality, which led to an dissatisfaction towards its products. After Penny Newman stepped onto the companys MD, she accelerated the organizations shift from charity spin-off to ethical business venture, by pushing for more customer focus and repositioning Cafdirect as a high quality coffee brand. 9 11. Sales Growth (1992-2000) 10 12. Timeline (1995-present) The success of Cafdirect Changes of communication approach 11 Oldcommunication approach:
13. C afedirect Newcommunication approach
Advertising 1999-2001 The picture of a smiling Machu Picchu conveyed products qualities-its smell, its freshness, and its exotic origin.12 14. C afedirect Original Oxfams over 600 shopsTraidcrafts mail-order catalogue Increase of distribution channels 13 In 1993, Gained national distribution in the Co-op and other supermarkets. Later stages, Offering its products through vending machines Expanding its products distribution channels to overseas 15. 14 Source: Marketing Relationship, Helen Peck, Chartered institution of Marketing 16. C afedirect Increase of products varieties 15 17. C afedirect
Today -- In 2007, the company's market share for hot drinks equated to 34%, 32%, and 14% respectively of the UK's Fair-trade coffee, tea, and drinking chocolate markets.-- In the overall market, Cafdirect is the 5th largest coffee brand and 7th largest tea brand in the UK. [ 16 18. C afedirect 17 19. Agenda Introduction Social Enterprise Fair Trade Cafdirect Theories Corporate-Reputation Quotient Kano Model Product/Market Grid Case Application Learning Insights 18 20. Corporate Reputation Quotient Theory 1
Source: Charles J. Fombrun, Cees Van Riel- Fame and Fortune: How Companies Build Reputations 19 21. Corporate Reputation Quotient
Theory 1 20 22. Corporate Reputation Quotient
Theory 1 21 23. Corporate Reputation Quotient
Theory 1 22 24. Corporate Reputation Quotient
Theory 1 23 25. Kano Model Theory 2 Source: Noriaki Kano(1984), Attractive quality and must-be quality, The Journal of the Japanese Society for Quality Control, April, pp.39-48 24 26. Kano Model
Theory 2 25 27. Kano Model Theory 2 Kano Model applied to Food&Beverage industry Source: Noriaki Kano(1984), Attractive quality and must-be quality, The Journal of the Japanese Society for Quality Control, April, pp.39-48 26 Factors KANO Category How to do better Sanitation & Safety Basic Needs Have to keep the customers above the average satisfaction level Quality Basic Needs Taste Performance Sustaining improve on to gain more return Package Performance Distribution Performance Sales Promotion Surprise Dig and focus on Brand Surprise 28. Kano Model Theory 2 Quality - Clients were usually concerned citizens for whom the charity aspect of fair trade prevailed over product quality. - Penny Newman-reposition Cafdirect as a high quality coffee brand - Direct Trade(long-term contracts and producer education built-in supply chain for reliable high-quality gourmet coffee) Sanitation & Safety- Government report - Product Recall of Cafdirect product (found small pieces of glass) - Hazard Analysis Critical Control Point, or HACCP, is a standard of food safety management system for any food producer wanting to sell into the UK and other European markets. Now it is for all parts of the supply chain Basic factors 27 29. Kano Model Theory 2 Performance factors
28 30. Kano Model Theory 2 Performance factors Package - Pure for charity (poor people & slogan for sympathy) - Cafdirect undertook a major brand relaunch in 2006 to help unify the brand look and aid it competitiveness 29 31. Kano Model Theory 2 Excitement factors Brand- 8 Awards in 2008 - August 2008: Cafdirect triumphs in Great Taste Awards- In a survey of 2,000 global brands Cafdirect ranks No. 1 as the most recommended brand Social Enterprise concept - Combining taste, price, ethics, and availability -(ethical consumerism) 30 32. Product/Market Grid Theory 3 Source: Cafdirect annual report 2006-2007 31 33. Product/Market Grid Theory 3 Ansoff Matrix Igor Ansoff, Strategies for diversification, Harvard Business Review, Vol. 35 Issue 5, Sep-Oct 1957,pp. 113-124 32 34. Product/Market Grid Theory 3 Cafdirect use 3 major approach
Igor Ansoff, Strategies for diversification, Harvard Business Review, Vol. 35 Issue 5, Sep-Oct 1957,pp. 113-124 33 35. Product/Market Grid Theory 3
34 36. Product/Market Grid Theory 3 When the current product is launched in a new market, there are three approaches to develop the market:1. Expand distribution channels.2. Sell in new locations.3. Identify the potential users. Igor Ansoff, Strategies for diversification, Harvard Business Review, Vol. 35 Issue 5, Sep-Oct 1957,pp. 113-124 35 37. Product/Market Grid Theory 3 Cafdirect Annual report 2005-06
36 38. Source: Cafdirect annual report 2006-2007 37 39. Product/Market Grid Theory 3 Cafdirect Annual report 2005-07 38 40. Product/Market Grid Theory 3 Originally, coffee, later, hot chocolate When a new product is launched in the current market, the intensive growth strategies could be to:1. Develop new features.2. Develop different quality levels.3. Improve the technology. Igor Ansoff, Strategies for diversification, Harvard Business Review, Vol. 35 Issue 5, Sep-Oct 1957,pp. 113-124 39 41. Product/Market Grid Theory 3 Cafdirect Annual report 2005-06 40 42. Agenda Introduction Social Enterprise Fair Trade Cafdirect Theories Corporate-Reputation Quotient Kano Model Product/Market Grid Case Application Learning Insights 41 43. Nike vs. child labor in the 90s Corporate Reputation Quotient application Source: Charles J. Fombrun, Cees Van Riel- Fame and Fortune: How Companies Build Reputations 42 44.
Corporate Reputation Quotient application 43 45.
Corporate Reputation Quotient application 44 46.
Corporate Reputation Quotient application 45 47. Kano Model application 46 48.
Kano Model application 47 49.
Kano Model application 48 50.
Kano Model application 49 51. Photo Editing Wow, my photos are sharpened automatically 50 52. Photo Editing Wow, I can add my own Text and Stickers 51 53. Community Wow, I can find something interesting about Hong Kong 52 54. Community Wow, this guy is quite popular here 53 55. Fun Wow, the way of browsing is cool 54 56. Fun Wow, I can explore the world 55 57. Fun Wow, they have widgets can be embedded into other sites 56 58. Product/Market Grid application
57 59. Product/Market Grid application The result was a 2.2% increase in net sales to 136,312 million yen 58 60. Product/Market Grid application 59
61. Product/Market Grid application
60 62. Agenda Introduction Social Enterprise Fair Trade Cafdirect Theories Corporate-Reputation Quotient Kano Model Product/Market Grid Case Application Learning Insights 61 63. Learning Insights From Cafdirects case, we learn that 1. SE should keep long-term relationships with small-holders and set high standard of quality 2. SE should market itself just like commercial organizations 3. Guarantee basic factors, improve performance factors and make Social Enterprise identity as the excitement factor 4. Expand to mass market by increasing distribution channels 62 New Cafdirect Old CafdirectStyle Business Idealistic Skills Sales, Marketing Intellectual Values Commercial but ethical Non-commercial Staff Professional Semi-volunteers Structure Performance-based, clear responsibilities Democratic, Political 64. The Divine Chocolate
63 Learning Insights 65.
The Divine Chocolate 64 Learning Insights 66.
The Divine Chocolate 65 Learning Insights 67.
66 Learning Insights The Divine Chocolate 68. 67 Learning Insights The Divine Chocolate 69. Divine Partners (Smallholders in South African) 68 Learning Insights The Divine Chocolate 70. Q&A 71. Backup 72. F air Trade Global Fair trade Sales 2007 $2,381,000,000 2006 $1,623,000,000 2005 $1,141,570,191 2004 $831,523,066 2003 $554,766,710 2002 $300,000,000 2001 $248,000,000