Hotel Chocolat and its business communication

                         Hotel Chocolat

                                                 IMC critical evaluation  

    

            

 

                                               Company background                               

Hotel Chocolat founded in 2004 is one of the British best known cocoa growers and chocolatiers with manufacturing facility in Huntingdon, Cambridgeshire. The retailer has more than 70 stores located in the UK, internationally in the US (Boston and New York); and also Netherlands, Denmark; and from 2010 also in the Middle East (Kuwait, Dubai, Bahrain). In addition, it has got concession with John Lewis.  Interesting idea is creating hotel Boucan in St Lucia, West Indies in 2011- Rabot Estate. The luxurious hotel presents unique interiors together with its cocoa restaurant and exteriors including cocoa plantation. In addition, it also provides Cocoa Juvenate Spa (cacao manicure, pedicure, massages, cacao facial etc.) and offers cocoa beauty products. The company established new cocoa restaurant Rabot 1745 in September 2013 in London where the menu brings contemporary recipes consisting of extraordinary ingredients combining sweet and salted tastes all together on one plate. The fact that the company Hotel chocolat grows their own cocoa plantation makes it different than other retailers offering chocolate products.

Hotel Chocolat is trying to attract non-price sensitive upper-class customers, in other words, self-motivated, individualistic group which is attracted by the products’ quality and design before considering the price. The top quality is the indulgence driven by a real experience for the consumers. Through the excellent direct selling and product sampling at the stores, it is unlikely to leave without purchasing some sweet treats. The brands offered by the retailer are Hotel Chocolat (stores), Rabot (cocoa restaurants), and Roast + Conch (Cocoa cafes). Hotel Chocolat puts special emphasis on luxury and vintage look of the product offerings (e.g. packaging) as well as graphic design of their communication drivers used (e.g. e-newsletters, catalogues or website). The goods are available to purchase online and in Hotel Chocolat stores. The store interior and its design play a big role, and their vision has been recognised by the retail week interior awards ‘Best in Europe’ at one of their Roast+ Conch stores in Covent Garden. Apart from that, Hotal Chocolat has been also awarded as well as one of the UK’s ‘CoolBrands’, ‘Great taste awards & the Academy of Chocolate Awards’ in 2009 and number 1spot in ‘Sunday times fast track 100’ (ranking fastest growing private companies in the UK).

Internet/social networking strategy

      

In today economic climate and particularly in this competitive market where the company operates, it is very important to combine both online and offline communication tools efficiently and cost-effectively. As number of smart phone users radically increase every year, the CEO of Hotel Chocolat Angus Thrilwell wants to be recognisable and attention-grabbing on high street as well as in digital space.

Hotel Chocolat established partnership with the internet marketing agency called Ambergreen in 2008 for 3 years. The strategy was focused on Pay Per Click (PPC), choosing relevant adcopy and search engine optimization (SEO) while complementing offline communication tools (e.g. direct mail). The strategy helped Hotel Chocolat to decrease expenses costs by 19.5% and rise in clicks by 16% (increase of 24% in revenue) and increased number of visitors to the website (natural search went up by 53%).

More recently, the company started to develop new fresh ideas within direct marketing and digital space. The current internet strategy is partnership with Red Technology which helps businesses to grow digitally (e.g. e-commerce, affiliates creation). Hotel Chocolat created a global digital platform and the idea was to create integration of its physical stores with their official website. One of the growth drivers in direct marketing is technology. It is cost-effective and provides retailer with customer data analysis. Customer can experience the same attention and customer service anywhere (on move, in-store or at home) as well as find all brands offered by the company under the one single domain. The website is linked with Google Maps, Click and collect (at any store), fast delivery with Shutl rapid fulfilment services (London-based tech company matching online retailer with daytime local courier within 90 minutes), online reservation at the restaurant or hotel, e-catalogue with focus on graphic design (also option to request free printed version by post), gifting services configuration (creating customer’s own gifting bag). Hotel Chocolat has also detailed information about air partners and flights to St Lucia from different destinations available on the website. In terms of direct response marketing, consumer behaviour is controlled through feedback channels and reviews available on the website. Customers are able to create their own account, rank the products and write comments or suggestions. After subscribing in store or on the website, customer receives special offers and info about sales promotion every week. 

Hotel Chocolat is very active on Pinterest (1264 followers), Instagram (1850 followers), Twitter (23 966), Facebook (72 387 fans), Linkedin, Google+ (mainly video uploads with various content- cocoa recipes, launching new products by CEO, viral marketing ads) and vimeo.  

(Source: https://vimeo.com/61209733, http://uk.westfield.com/stratfordcity/news-and-events/hotel-chocolat)

Hotel Chocolat tries to go viral!

The internet is the mirror of our everyday life, therefore companies’ online communication strategies are reflection of offline communication activities. On basis of that, many companies are trying to create viral marketing strategies with a goal to entertain and get a huge amount of attention fast (e.g. Lynx with augmented reality ad at Victoria Station or T-Mobile dance at Liverpool street station). Hotel Chocolat has recently created an idea of viral marketing in Westfield Shopping centre in London placing a huge Christmas box with the sign ‘Pull the ribbon to unwrap me’. After pulling the ribbon by random people in the shopping centre, Hotel Chocolat surprised with music show and professional dancers. 

(http://www.youtube.com/watch?v=M9UXRGOyvF0). The video was posted on the 3^rd December and already got more than 13 000 viewers.

Another example is creating film Beau Bunny that was promoting Easter by, again, product sampling on high streets in all towns the company operates. With his very current, elegant outfit, the promotional idea matches company’s brand. The video is presenting all European market shares- capturing Amsterdam, Copenhagen and London mainly. (https://vimeo.com/61209733)

Sales promotion strategy

One of the company’s special approaches within the customer engagement and product development strategy is Hotel Chocolat tasting club.

The chief executive as well as innovative entrepreneur of Hotel Chocolat Angus Thrillwell established his own ‘chocolate bond’ in 2010 for 3 years. The bond was approved by Financial Services Authority to grow his business more internationally. The CEO approached 100 000 members of the tasting club who had a certain deadline for applying. The customers were actually the investors, and the idea came from them wanting to be partners working closer with Hotel Chocolat. There were 2 types of investments- £2000 (gross annual return- 6.72%) and £4000 (gross annual return- 7.29%). The returns were paid twice a week in chocolates delivery. The 3-year investment program covered £3.7m. The bond scheme attracted the media- e.g. retail week, telegraph, independent, CNN, realbusiness.co.uk, BBC news. (http://www.telegraph.co.uk/finance/businessclub/7887060/Hotel-Chocolat-closes-chocolate-bond-with-3.7m-fundraising.html)

How the membership for Chocolat tasting club works?

Members can decide whether or not to continue with tasting after receiving the first introductory selection for £9.95. The selections of the most recent recipes are made every month, but there are no obligations as customers can also join tasting club every 8 or 12 weeks, and that means they’re able to cancel an order at any time as well as change the selection types. The benefits for being a member are the following: membership pack including certificate for direct feedback and ranking products; exclusive vouchers and offers available for only tasting club members; and welcome gift (chocolate slab) as well as 5% off all online and in-store purchases (these don’t include John Lewis purchases) and an access to 50% off on an exclusive selection on the official website. Under the Hotel Chocolat competition every month, members can win free selections of chocolate, but most importantly holidays at Bounce Hotel Chocolat luxurious hotel in St Lucia.

 

                              

 
                                   

                           
                                                          

                                                    

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      Bounce Hotel- Book 7 nights for the price of 5 nights, or 4 nights for the price of 3 nights when booking between May and November 2014.

                                                                       CEO of Hotel Chocolate, Tasting Club 

                              

                                                                       

The company is focused on retention programme- tasting club. The overall sales promotion strategy is all about free gift issued after spending certain amount of money. The sales promotion strategy is therefore oriented on long-term customer engagement- tasting club membership, and the main short term oriented sales promotion strategy is linked to regular updates  within the main periods: Mother’s day and Father’s day, Halloween, Valentine’s Day, Easter and Christmas.

However, the best benefits are the ones available for members of the tasting club.

Sponsorship strategy

Hotel Chocolat had recently sponsored the big fashion event ‘Cardiff fashion week’ in Cardiff, United Kingdom. This is certainly very relevant fit between the two parties (Hotel Chocolat as well as Cardiff fashion week event) in terms of targeting and positioning brands. The fashion is in other words business of creating and selling new trends, therefore the event reflects the ‘fancy’ image that has been established by Hotel Chocolat’s innovative business strategies.

                                                                               

                                                                                     

Sponsorship is not considered to be measurable tool, therefore is under the above the line communication tools. Every company’s vision when developing sponsorship strategies is linked to establishing media coverage opportunities- mainly in terms of publicity. Successful sponsorship should attract not just only media owners but also influencers (e.g. bloggers).

                                                                            

This event is therefore considered to be absolutely perfect chance for Hotel Chocolat to increase awareness of its business, and it means that it is actually still possible to determine whether the sponsorship worked well. The retailer was providing the guests with chocolate samples before every catwalk show at the event.   

The highlight of the Cardiff fashion week was its final event, The Cardiff Retail Awards, which ranked companies through assessing their marketing strategies, customer service, corporate social responsibility and training policies. Hotel Chocolat was awarded as the best in providing customer service.                               In addition to this, Hotel Chocolat invested into the right event in terms of its brand and target audience (non-price sensitive customers).       

Conclusion

As the bond was created to expand the business, this might be the reason why the company doesn’t invest money into the advertising and broadcast, but invests most into product development and digital growth. Regarding its business expansion, the awards such as ‘fastest growing retailer’, and from my own experience, it seems successful.

 If you have anything to add or comment, send me an email here: janavytykacova@yahoo.co.uk.

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