Chargers Candy

1
Chargers Candy

• Team A2
• Elvis Amankwah
• Josh Letourneau
• Grandon Smith
• Charlie Echols
• Tom Meaker

2
Company

• Founded November 2001
• Mother/Daughter Mgmt Team
• Innovator of the Year by Confectioner Magazine
  2002
• 2003 Best Confection in Category Canadian
  Grocer Magazine
• Filmed and Featured on Food Networks Treats of
  the Trade
• 2 Products Chargers and ChiliLime Gum

3
Company Problems

• Finances Lack of widespread branding and rising
  slotting fees apply financial demands that the
  company is not in a position to currently
  overcome.
• Distribution Finding salespersons to represent
  Chargers Candy within the North America segment
  is difficult with only two offerings currently in
  product line.
• Warehousing/Logistics Rising fixed expenses due
  to changes in the logistical structure (primarily
  storage and warehouse space) have placed
  additional financial strains on the company.
• Cost of Capital Chargers Candy currently is
  pursuing additional financing, but capital
  markets for extremely small firms have become
  increasingly competitive. In addition, the cost
  of capital has risen steeply since 2001.

4
Chargers

• Chargers are red, caffeinated, chocolate covered
  espresso beans that are sold in a patented tin
  that resembles a D-cell battery.
• Points of Difference Unique Packaging and
  Portion Control

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Chargers
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Chargers Distribution

• Cost Plus World Market
• Barnes and Noble College Division
• Harmon Stores
• Walgreens
• Planet K
• Chapters Canada
• Mac's Canada
• 7-11 Canada
• Chemical Evolution

7
Competitors

• Energy Candy Category

8
Competitors (Cont.)

• Shock-A-Lots
• 1.50 Retail

9
Competitors (Cont.)

• Buzz Bites
• 3.99 Retail (per tin of 6 candies)

10
Competitors (Cont.)

• Caribou Coffee Reindeer Nibblers
• 1.75 oz.
• Retail 2.95

11
Customers

• Young Affluents in Hong Kong
• Breaking consumer research within said market
  show that coffee appeals to adventurous,
  open-minded, young, affluent, urban consumers
  that are more exposed to Western influences and
  tend to look up to Western lifestyles.
• Note Euromonitor Research

12
Customers

• Another large consumer group, which influences
  the coffee consumption, is returnees. China has
  seen an influx of returnees (mainland Chinese
  students returning from Western countries) over
  the last five years.
• Euromonitor says that many of these returnees
  have lived in Western countries for a decade and
  they have become accustomed to the coffee
  culture. Like the growing number of expats now
  living in China's main cities, these returnees
  are helping to push the high end of the coffee
  market in particular.

13
Young Affluents

• "A consumption crazy, aspirational, driven
  generation, they are money-focused yet moral,
  school is important and success everything. Their
  favorite food is fast, favorite drink is soft and
  preferred birthday gift a mobile phone.
• Note Synovate PAX Research

14
Young Affluents

• 8 in 10 Young Asians influence family shopping
  for soft drinks/snacks
• 3 in 4 influence the family visit for fast food
• 6 in 10 influence tv channel selection during
  shared viewing
• 62 own mobile phone
• 45 own personal desktop
• 50 of 12 to 24 year-olds name the Internet as
  the most helpful medium for product and service
  information over TV (32) and newspapers (10).

15
Young Affluents

• Today's Young Asians worry about the future ahead
  and what being an adult may hold for them. A
  secure job is the number one concern about
  growing up for 19 of Young Asians, while 16
  worry about being financially stable and 9 worry
  about adult responsibilities.
• 18 voted world peace as the number one change
  they would make to the world. A further 16 are
  aspiring activists, wanting to change social
  problems like drugs and corruption.
• While listening to their MP3 players (owned by
  23 of respondents) you'll find Young Asians
  searching the web for information, emailing,
  downloading entertainment and interacting with
  their friends, and games, online.

16
External Environment

• Hong Kong is an ideal market platform for doing
  business in Asia, especially China.
• Why? Free port with virtually no
  tariffs/duties. Strong rule of law and respect
  for property rights. Hong Kong partners typically
  know and have close links to markets in China and
  the rest of Asia.

17
External Environment

• Open to international tourism, trade, and
  investment.
• Population 6.9 Million
• Visitors 20 Million
• GDP Per Capita 36,800
• GDP Growth 8
• U.S. Exports 13.5 Billion (11.9 of Hong Kongs
  Imports)

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External Environment

• Other Strong Points of Hong Kong
• World-class infrastructure
• Free-flow of information
• No restrictions on inward/outward investment
• No foreign exchange controls
• Simple, low-tax regime
• World Financial Center

19
External Environment

• Market Entry Strategy
• A. Hong Kong agents and distributors can increase
  sales of U.S. products in both Hong Kong and
  China.
• B. Hong Kong firms are eager to work with
  exporters.
• C. Companies entering this market should
  understand Hong Kongs fast-paced business
  climate.

20
External Environment

• Trade Promotion and Advertising
• Special Trade Fairs and Exhibitions (HKCEC
  Hundreds of exhibitions held annually)
• Advertising and other PR activities (TV daily
  audience is 2.25 million. Hong Kong tv also
  reaches neighboring Guangdong province).
• Seminars
• In-store Promotions
• Joint Promotions