The Story of Butlers Chocolate Cafs

The original Butlers Irish Chocolate Company was founded in 1932 and has been owned by the Sorensen family since 1959. In the 1990s the company planned to expand and undertook a distinctive and innovative marketing strategy to drive this development. The objective was to build awareness of their products among a wider audience by attracting new and different customers to their brand. This broader awareness would lead to increased sales. They decided to create a strategy that would also use their existing attributes of quality and excellence. As good strategists, Butlers also intended to use their existing core competencies the ability to produce and market an attractive range of unique chocolates.

The importance of knowing your business environment

Many ideas, which seem attractive at the planning stage, never get to the market place at all. There is usually no guarantee of success. To improve the chances of success it is necessary to analyse the environment to see if the prevailing conditions and timing are right for the product or service. This is called environmental scanning. Accurate scanning can save a lot of time and money in the long term. When Butlers carried out this exercise, the economic and sociocultural factors of the environment seemed most important. The economy was ourishing. Ireland had suddenly become a richer country and people were able to travel more. This, in turn, had a huge impact on lifestyle (socio-cultural). Irish people were becoming more familiar with the continental style of caf and with different types of coffee. The caf was becoming a popular meeting place for friends and colleagues. In addition, people were now buying coffee to take to their place of work. The range of coffee had also improved, with different origins of coffee beans available, and with espresso and milk based coffees becoming popular. These life style factors offered a great opportunity for Butlers to implement the new strategy.

Butlers Chocolate Caf, Henry Street Dublin

Excellence is the key

The success of the cafs is based on excellence in all aspects of the operation. For Butlers, quality alone is not enough. Accordingly, visitors nd a wide variety of world class chocolate products, displayed in an attractive and friendly setting. Dcor and ambience are carefully designed to enhance the experience. Customers can order from a broad menu of coffees - lattes, cappuccinos and many more. They are also offered a choice of chocolate to eat so they can sample the range, before deciding to purchase a larger quantity.

Back in 1932, Mrs Bailey-Butler began to produce a range of handmade chocolates from her house in Dublins Fitzwilliam Square. What made her chocolates so different was the combination of the nest chocolate with fresh Irish cream, butter and eggs. She also had her own secret recipes. Butlers Irish Handmade Chocolates are still located in Dublin and Mrs Bailey-Butlers original recipes and techniques have been handed down to the present generation. They have stood the test of time, winning many top awards, in Ireland and abroad. In November 1998 the rst Butlers Chocolate Caf opened its doors on Wicklow St, Dublin. Since then, thousands of customers have visited the shops. In addition to a relaxing caf ambience, Butlers Chocolate Cafs also offer a top quality retail outlet. This unique combination is now very successful. It is a unique concept that has become hugely popular with tourists and locals alike. Butlers have also introduced many other innovations including: mail order gifts internet marketing club membership discount schemes. Shopping online via their secure server provides all the benets of a modern IT system. All transactions are encrypted to protect the customers information. You can nd out more about Butlers by visiting the web site at www.butlerschocolates.com and at www.spiritofenterprise.net

The critical feature of timing The innovative idea - Butlers Chocolate Cafs
How can a range of chocolate products be brought to a wider market? Butlers answer to this question was brilliant and insightful. Why not market chocolates through a caf? With this idea, the Butlers Chocolate Caf was born and the rst outlet opened in Dublin in 1998. In effect, the company was actually creating a new channel to market. This concept would enable Butlers to diversify into coffee, which they considered a complementary product. It would also enable them to increase sales and footfall patterns in their retail stores. For Butlers, this was a truly intrapreneurial triumph. The idea that people would come to a caf to drink coffee and would then be potential purchasers of chocolates was original and novel. Like many innovative ideas it now seems obvious. This is often the essence of entrepreneurial ideas; once they are implemented they appear to be obvious. However, before such an idea becomes a reality there is a lot of preparation necessary to ensure that the concept will work in practice. Because of their accurate reading of the environment, the timing was right to meet the needs of a customer base already familiar with Butlers reputation. Today, Butlers Chocolate Cafs have become a successful business line. There are now seven cafs in the chain. The outlets at Dublin Airport and Dundrum Town Centre in Dublin are considered to be the agship operations. The atmosphere and decor of the caf, based on the continental model, providing a relaxing experience for those who want to meet others or to take time out. There is time to savour the coffee and also to sample the chocolates. For those on the move there is the fast and efcient take away service.

Make it easy to give chocolates as a gift

Butlers Chocolate Cafs have raised the level of awareness about the companys chocolate products signicantly. This familiarity with the brand means that Butlers is often rst choice for both personal consumption and as gifts for others. Accordingly, Butlers offer a comprehensive range and variety of chocolates for the various gift occasions throughout the year. The caf provides a showcase of gifts for Christmas, Easter and other special occasions. Customers who are in the caf environment have time to choose presents at leisure without feeling hurried.

Conclusion
Butlers were looking for a way to increase both brand awareness and chocolate sales. Conventional marketing techniques could not guarantee these outcomes. So Butlers developed the innovative caf concept. This provided a new route to market and resulted in superior levels of brand recognition and sales, through additional sales to existing customers and by attracting new customers. It was a sound, well thought out strategy - the combination of a brilliant piece of lateral thinking, good timing, and accurate environmental analysis. However, even when being innovative Butlers stayed true to what they know best - their core values of excellence.

The Story of Butlers Chocolate Cafs

Learning Outcomes
This case relates the story of Butlers Chocolate Cafs. Already a successful company, Butlers set out create a new line of business which would attract their existing customers and also create a new set. Having studied this case, the student should be able to: Dene what is meant by the term intrapreneurial Describe the purpose of environmental scanning Explain the relevance of quality in a customer oriented business Suggest why core values are important to Butlers Discuss the process of lateral thinking.

Keywords
Innovative; marketing strategy; core value; channel to market; intrapreneurial; concept; core competencies; prevailing conditions; socio-cultural; lifestyle; agship; dcor; showcase; conventional marketing techniques; lateral thinking; sound environmental analysis; environmental scanning; differentiate; low cost; brainstorming.

Core values Values are our attitudes and beliefs. Core values are the most important of these. For example, an organisation might have a core value of customer service. Another might have a core value of value for money. Encrypted Information which is coded so that no unauthorised person can access it, is said to be encrypted. The word cryptic is from the Greek and means concealed or hidden. IT system An Information Technology system of computers, software and communication links. Check out the Glossary of Terms at www.spiritofenterprise.net

SWOT/SCOT You are drawing up a SWOT/SCOT analysis for Butlers. What threats do you think the company will have to deal with in the near future? Remember that opportunities and threats originate in the external environment. (A similar exercise can be done for the other elements of the SWOT, either separately or as a single exercise). Market Research Assume that Butlers wish to carry out market research to establish the level of customer satisfaction. Can you suggest who might be the subject of this research? Then, design a questionnaire for use during the research. Marketing Mix If you were carrying out a 4Ps analysis for Butlers, what would you say about place? Career Investigation A caf company has advertised a job for a Marketing Assistant. You decide to apply. Draw up the covering letter that you would send with your CV. What questions would you expect to be asked at the interview? What questions would you ask? Idea Generation Use your idea generation techniques to identify other products that Butlers might offer in the Chocolate Cafes. Do a reality check on your suggestions. To do this, ask whether these products; Require knowledge, skills or experience that Butlers dont currently have Would present difculties in gaining customer credibility

Glossary of Terms
Intrapreneurial An intrapreneur is an entrepreneur who works in an organisation; the intrapreneurial organisation allows the skills and qualities of the person to ourish. Environment In business terms this means the surrounding conditions of the business economic, cultural etc. Environmental scanning Environmental scanning is fundamental to the business planning process. It involves searching for environmental factors that might affect the business. These could be political, economic, cultural, social, legal, technological or other factors. Economic In this context the term means anything relating to the economy. Ination would be an example. Socio-cultural This term is generally used to mean a combination of social and cultural factors Lifestyle Our habits or patterns of living are called our lifestyle. It includes the things we do, our interests and pastimes etc. Flagship Traditionally, the agship was the warship carrying the eet commander and his ag. It now means the most important component in a group. Dcor This is the interior decoration, including the furniture etc in a room. Ambience This usually means the general mood or atmosphere in a place Lateral thinking This means thinking in non standard ways in order to create new concepts and ideas.

What Does This Case Tell Us?

Building on one successful idea to create another How can a company use the success and the skills they have gained to develop the business by building on the original idea? Businesses are often built on one good idea, and some companies fail because they do not continue to innovate. Entrepreneurs need to constantly think of new concepts and one of the best ways to do this is to build on existing strengths. Building on current strengths It is important to build on strengths because this means that the company is using its existing skills. Butlers looked beyond their existing chocolate products but retained their strengths of service, quality and excellence. Their reputation meant that customers were willing to try their new product - the Chocolate Caf. Need to stick to core values While Butlers differentiate their product by providing quality and variety, other businesses have different core values. Examples of these are low cost which many airlines now focus on. Lateral Thinking The point about entrepreneurship sometimes isnt about completely new ideas, but about looking at existing ideas in a new light. Think about how the Walkman was invented. It was the combination of technology and the portability that made it a success. Then see how this idea of music for people on the move developed through the mini disc to the iPod. The Butlers concept of the Chocolate Caf is a classic example of lateral thinking. Lateral thinking is also called thinking outside the box. Brainstorming is also a powerful technique for creating new ideas.

Student Activities
The activities can be undertaken by individuals, pairs or groups. Most can be given as discussion topics or assignments requiring students to produce a report or presentation. What have we learned about? Having read the Butlers case, what have you learned about the following issues? The importance of intrapreneurial activity in an organisation The purpose of environmental scanning The advantages of building on current strengths The advantages of retaining core values

Team Skills Butlers is a successful business with a dynamic management team. Teams can bring many different skills together. What skills do you think the Butlers team uses to run the company? Is it necessary to have a team or could one person run the enterprise by themselves? Business Planning Assume that the Butlers team wishes to expand their operations to France. What section headings would you expect to see in their business plan? Business Objectives All businesses set objectives during the planning process. What types of objectives do you think Butlers might set? Do you know any method for assessing whether an objective is reasonable? Market Segmentation A business often has groups of customers with different requirements. These different groups are called market segments. Can you identify the segments in Butlers market?

When asking these types of questions you are looking for any synergies between the existing products and the new one. This means that the different product lines of business must t together and be credible to customers. Business Term Matching One student chooses a term from the Glossary of Terms. Colleagues then must provide the denition Alternatively the terms and description can be cut from a template and handed out at random. Matching terms and descriptions must then be located.

Key Words Check the students understanding and interpretation of key words. The list of key words can be handed out for discussion or individual words can be used as a class discussion topic.