Godiva Case Godiva is segmented into the luxury Market and has invested a lot in order to position its brand in the US market including a marketing campaign with the renowed jeweler H. Stern.
Its president of North America is wondering about the decision on expand its distribution into the major retail companies in the US and with that increase sales, this idea came up because Godiva lost its position in the US to Lindt, which its growth can be explained by the strategy of increase its distribution through national retail chains.The president of Godiva in the US is concerned that this decision can risk Godiva brand as a luxury brand. “Dunkin knew that one of the biggest difficulties facing all luxury marketers expanding their distribution is the control and maintenance of their brand image” “Godiva’s brand mark was unmistakable, but consumption needed to be increased” “Lindt & Sprungli surpassed Godiva in gourmet chocolate sales in the United States, but Godiva still remained the most recognized chocolate marketer”The decision on increase the sales through the national retail chains and discount stores can be a bad strategy because this means that: Godiva can risk their premium brand image, decrease its profit margin, harm its luxury stores sales through cannibalization, competition of new players. Godiva chocolate is very much used to present people.With this in mind, the company has invested a lot in marketing campaigns, in packaging and in its own luxury retail stores to sell its premium chocolates and also publicize its brand. They have also achieved 6% of sales in the e-commerce in the direct market and it would be very damaging for them to lose all this equity.
In addition the fact that Lindt increased its sales in the US taking the 1st position in sales from Godiva it doesn’t mean that the company has been more profitable than Godiva.In fact the chocolate luxury products has showed to be more profitable than the regular chocolate. It is known that the discount stores work a lot in shrinking the suppliers costs in order to offer their customers lower prices. Moreover, Godiva has invested a lot in its own boutiques and therefore the idea of selling in the retail chains could take customers from these stores to buy in the supermarkets. As pposed to the regular chocolate market, the luxury chocolate segment shows a very high increase through the years to come. It was also disclosed that new players are trying to enter in the US market and therefore it would be important to Godiva to defend its position in the US market instead as the best luxury brand instead of fight for sales.
In the same time the increase of sales could be achieved through the entrance into new markets such as the emerging countries.