Tony's Chocolonely describes its product as its "biggest marketing tool", but having now established its brand it is now looking to scale, with plans to start investing in paid media soon.

 Tony's Chocolonely has not only spent money on marketing, but it has done so by maximising every marketing lever. The chocolate brand should therefore be celebrated as a marketing success story instead of being seen as a proof of marketing's irrelevance, argues Keerti Nair, Marketing Orchestration & Effectiveness Lead, Publicis Groupe.

By now, we are all familiar with the Silicon Valley tech founders who firmly believe if you have a good product, it will sell itself. Perhaps of the whom the most famous is Jeff Bezos, founder of Amazon, who is quoted to have said, "Advertising is the price you pay for having an unremarkable product or service". 

I also recently came across a quote in a leading marketing trade magazine about a chocolate company apparently growing "without spending a penny on marketing". Fast forward a few weeks and the CEO at a US based burger company claimed on a popular podcast how they "built a burger empire without any marketing". By no means is this a unique claim with people quoting Tesla, Trader Joe's & Lululemon in the US to Brew Dog and Monzo in the UK to Mamaearth in India. But the list of brands is only matched by an equally long list of questions.

Cause for confusion

 The world of marketing is both confusing and fascinating not in the least because we invent definitions of what qualifies as "marketing" or "advertising" depending on not just an argument but on the agenda at hand. So where you work, what is your specialism, what are you signalling to your peers and most significantly, which growth lever do you want to get behind determines which definition of marketing you would conveniently choose for that occasion. The result is a steady supply of provocative headline-grabbing quotes from marketers of all hues, shapes, sizes and leanings.

While there is not one definition of marketing, the American Marketing Association defines it as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."

Marketing myopia

 In his famous 1960 Harvard Business Review article, "Marketing Myopia", Harvard professor Theodore Levitt described the inherent risks of focussing solely on product features and benefits whilst ignoring customer needs, wants and desires - "People don't want a quarter-inch drill. They want a quarter-inch hole!"

Let us fast forward five decades to 2012 when another HBR article with the headline "Marketing is Dead" claimed that:

Buyers are no longer paying attention

CEOs have lost all patience with marketing

The advent of social media meant that corporate speak is ineffective when people could rely on their own community for an authentic review of brands and businesses.

And what was the author's recommendation to solve this crisis? That marketing practitioners should rethink their customer value proposition around community of advocates and influencers.

Back to first principles: Marketing is value creation

So regardless of whether you think marketing is dead or more alive than ever before, everyone agrees that the most important job in any business is that of "value" creation but how do you go about creating or reinforcing it?

In Rory Sutherland's words, value can be created in the mind every bit as much as it can be in a factory and that we value things according to not what they are but what they mean to us. And what they mean depends on context and is influenced by storytelling, framing, signalling. And it is this value that makes brands more famous, distinctive and worth the premium you pay. 

What are the key considerations that help justify a price premium? The original marketing mix model proposed by Prof Philip Kotler and E Jerome McCarthy in 1960s stipulates the famous 4Ps i.e., Product, Price, Placement and Promotion.

Tony's Chocolonely's marketing recipe

 The quirky story of Tony's Chocolonely started back in 2003. A Dutch journalist Teun van de Keuken learned of the widespread modern slavery and illegal child labor across cocoa farms in West Africa despite explicit commitments by world's leading chocolate brands to eradicate slavery and child labor from their supply chains.

Teun decided to clean this up by being an investigative journalist on a popular Dutch TV program called "Keuringsdienst van Waarde" looking to unveil the sordid details of the chocolate supply chain. He followed this up in 2005 by launching 5000 limited edition chocolate bars into the Dutch markets under the brand name of Tony's Chocolonely. Since then, it grew from just €1m in 2011 to becoming a Fairtrade certified B Corp with worldwide revenues of €110m by 2021.

So what are the key ingredients of Tony's growth?

Product & packaging. Packaging is when a product first becomes a brand. It helps people notice and remember the brand at key buying moments. Research from Ehrenberg Bass Institute establishes the role played by distinctive assets, i.e. colours, shapes or typefaces in driving mental availability. The Tony's Chocolonely team is well aware of these learnings. The original wrapper, made of matte paper with thickset retro typography makes it look both fun and whimsical whilst the bright red colour highlights the alarming levels of exploitation in the cocoa industry. Its uneven bar shape signals the profit inequality across the chocolate supply chain. This has ensured a distinctive look and feel for the brand to break the clutter across store shelves both on- and offline.

Price & placement. The brand is priced at a significant premium over regular chocolates being placed in the 'luxury chocolate bar' category shelf and competing with the likes of Lindt, Green & Black and Montezuma. Even more interesting is the use of price anchoring as the website features being available at luxury department stores such as Liberty London, Whole Foods and artisanal cafes and restaurants across key cities in the key markets of the Netherlands, UK, US and DACH. It has gone beyond regular retailing arrangements and struck strategic partnerships in ethical sourcing of cocoa with the Dutch retailer Albert Heijn.

Promotion. To quote Tony's latest 2021 annual report, "Tony's was born on TV". Since then, Tony's Chocolonely has used many promotional tactics from documentaries to sponsorships to publicity stunts of "Happy activism" to draw attention to both the cocoa issue and the brand itself. In 2020 alone, it launched a manifesto film narrated by the celebrated British actor, Idris Elba to show what the brand stands for, what it believes is fair or unfair and to spread the word about their motto, "Crazy about chocolate". It has launched branded coffee and chocolate flavour collaborations at high-end cafes from London to Bournemouth and with other brands such as Ben & Jerry's, benefitting from the halo effects across the board.

If anything, this brand has not only spent money in marketing, they have done so by maximising every marketing lever. Tony's Chocolonely's marketing should therefore be celebrated as a marketing success story instead of being seen as a proof of marketing's irrelevance.

1. In conclusion

 

1. Historically, brand managers used to oversee all marketing activities for a given brand. However, over the past two decades, marketing as a function has become more fragmented and specialised in terms of capabilities. For instance, offline media, content, partnerships and sponsorships, ecommerce/retail media, PR, owned platforms are all managed by separate teams. This has also meant that the personal branding and influence of founders such as Teun Van De Keuken or Tesla's Elon Musk is seen to sit outside traditional marketing, even though the roles they play are similar to those of any celebrity endorsement or paid advertising.
2. We need to reestablish a common understanding of what constitutes marketing which is more outcome focused, i.e., aimed at value creation, making brands famous and distinctive.
3. A simple heuristic is to look beyond the headline and evaluate the roles played by all 4Ps in a brand's value creation before writing off the impact of marketing on its growth.

How Tony's Chocolonely grew without spending a penny on marketing

 

Task

Based on this article published in the UK last year and on the three points highlighted in its conclusion, comment and advise how the company can use the three recommendations above to expand globally. Take each one of the three points and discuss them separately. Respond  as a marketing professional.

Answer rating: 100% (QA)

The article highlights the success of Tonys Chocolonely and its innovative approach to marketing To expand globally the company can leverage the following three recommendations mentioned in the conclu... View the full answer