The Battle for the Hearts, Minds, and Wallets of China's Consumers
Author: Lawrence L. Allen
Pub Date: October 2009
Print Edition: $19.95
Print ISBN: 9780814438121
Page Count: 256
Format: Paper or Softback
e-Book ISBN: 9780814414330
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This book is the story of the five global titans of chocolate—Ferrero, Cadbury, Hershey, Nestlé, and Mars—that battled to capture a once-in-a-lifetime opportunity to establish their brands with one-fifth of the world’s population. It is also the inside story of East meeting West through the introduction into China, a xenophobic land of austerity and deprivation, of an icon of the Western world’s decadence and self-indulgence: chocolate.
Is it really possible that until thirty years ago a billion people had never even tasted . . . chocolate? When we come to grips with the ramifications of this fact, we begin to see not just the size of the opportunity that awaited the five chocolate giants in China, but also the awesomeness of the challenge. And not every competitor met that challenge. Although still ongoing, the chocolate war in China has already seen some very clear winners and losers.
Chocolate Fortunes takes you inside one of global business’s most intense, complex, and fascinating market assaults. At its heart, the campaign to turn the Chinese people into chocoholics is really about globalizing the last great frontier. If there is an easy part, seeding an insatiable desire for chocolate may be it. (After all, “who doesn’t like chocolate?”) But what about building a business from scratch with virtually no precedent? What about navigating a boundless (and ever-shifting) sea of local, provincial, and national laws and regulations before executing even the most pedestrian business activities?
How do you run a business when the economy in which you are operating is still in its infancy, still an inscrutable mass of conflicting realities and amorphous indicators? There is no one answer, no “right or wrong way,” but for starters, step behind the scenes to witness how:
• Ferrero gained the first industry foothold and continues to dominate the high end of the Chinese chocolate market—while keeping local “copycat” chocolatiers at bay
• Cadbury’s decision to use local fresh milk in its Dairy Milk bars changed the taste of—and shaped market reaction to—its flagship product
• Hershey built up its China business before committing to major infrastructure investments in-country
• Nestlé found out if, like with its hundreds of other food products, selling chocolate as an economical snack food was ultimately the way to go in China
• Mars, first to plant its company’s manufacturing flag in China, led an endurance race that tested its commitment to consumers and determination to win the chocolate war
While each of the Big Five purveyors profiled in Chocolate Fortunes brought its own identity and strategic vision to the battle theatre, their varying degrees of success or failure hinged on combinations of savvy and circumstance, of perseverance and flexibility, and of textbook business excellence and sheer luck. The lessons learned are at once practically instructive for all internationally minded businesses and fascinating reading in the classic East-meets-West mold.
Lawrence L. Allen is a former senior executive for both Hershey and Nestlé and was deeply involved in both companies’ efforts in China. He has spent more than twenty years building consumer brands for multinational companies in China. Mr. Allen lives in Beijing.
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