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Rocky Mountain Chocolate Factory Analysis

Essay by   •  January 2, 2011  •  3,392 Words (14 Pages)  •  3,536 Views

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Executive Summary

Rocky Mountain Chocolate Factory gave us, the Perfect T.E.N.S, an exciting opportunity to help their company. The challenge that was given to us was to decide on a new location for a Rocky Mountain Chocolate Factory store. We did a lot of research on the Company, took many factors into consideration, and developed criteria in order to narrow our search down to three potential locations: Orlando, Florida; Chestnut Hill, MN; and Times Square, NY. Based on the selected criteria, we developed a system used to rate each potential location against each other. Some of the criteria used in the rating system included population, median household value, average household income, food services, quality of life, and quantity of competition in the same location. Upon completion of the extensive research and quantification, the Perfect T.E.N.S. decided on Times Square, NY to be the best location for a new store.

Once Times Square was chosen, Perfect T.E.N.S. did further research and assessed how to go about implementing this decision. Some of the research included an estimate of financials as well as marketing strategies. Recommendations were also made which included such categories as product, place, price, and promotion.

RMCF Overview

Company History

A car wash or a chocolate factory? That was the decision that Rocky Mountain Chocolate Factory founder Frank Crail had to make over 25 years ago, when he decided to realize his business dreams in the small town of Durango, Colorado. "I think I made the right choice," Crail confirmed in a statement found on the chocolate company's website (RMCF, 2007). Starting as just a small shop on the Main Street of Durango, nobody could have imagined it would turn into a huge business with the need for a "53,000 square foot factory located on the town's outskirts, built to supply hundreds of franchised stores throughout the United States and the world" (RMCF, 2007).

Keeping the focus on the quality of their confectionary products always was, and remains today, the main priority of the Rocky Mountain Chocolate Factory. "Without that customers aren't going to stay around long," stated Crail in a testament on the company's website (RMCF, 2007). That philosophy is the key to their success. "As of March 31, 2007 there were 5 Company-owned and 316 franchised Rocky Mountain Chocolate Factory stores operating in 30 states, Canada, Guam and The United Arab Emirates" (Edgar-Online, 2007).

Company Profile & Products

Currently, the company manufactures about 300 confectionary candies including chocolates, caramels, clusters, truffles, candy apples, fudge, packaged candies, and many other appetizing items. "The company maintains the unsurpassed taste and quality of its chocolate candies by using only the finest chocolate and other wholesome ingredients. The company uses its own proprietary recipes, primarily developed by its master candy maker" (marketwatch, 2007). This strategy gives the candy from Rocky Mountain Chocolate Factory that sought after "home-made" taste, because the original recipes are still being used with the best ingredients.

Target Market

Rocky Mountain Chocolate Factory focuses its target market on the more upscale chocolate buyer, ages 18-64 who demands fresh, high quality confectionaries as opposed to mass-produced factory type confectionaries. They usually locate their stores in areas with a high volume of visitors such as malls or airports.

Company Description

To fully describe the company, an analysis of strengths, weaknesses, opportunities, and threats was conducted.

The Rocky Mountain Chocolate Factory has many strengths that have helped to boost its success. First and foremost, "The company believes that its principle strengths lie in its name recognition, its reputation for the quality, variety and taste of its products; the special ambiance of its stores" (marketwatch, 2007). The stores are very appealing to customers, and are easily remembered due to the aesthetically pleasing sight of a constant display of candies. Along with a pleasing environment, the stores are known for their high-quality customer service. "The Company emphasizes excellence in customer service and seeks to employ and to sell franchises to motivated and energetic people," (marketwatch, 2007). The Rocky Mountain Chocolate Factory boosts its profit by offering a very good variety of products, with special promotions for specific seasons and holidays. Another strength of the company is that it did not take out loans, and therefore had no long term debt in the year 2007.

There are few weaknesses that Rocky Mountain Chocolate Factory could work on to further its success. The one weakness we found was the lack of awareness of the company. Unless actually encountering a Rocky Mountain Chocolate Factory store, many people have never heard of the company. Although once seen, the store leaves a lasting impression, it is important to get potential customers to their retail locations. It seems as if the major form of advertisement for the chocolate company is word of mouth. This goes along with a weakness of not putting themselves out on the market enough. Many of the Company's competitors are notorious and well-known name brands, while the Rocky Mountain Chocolate Factory is not as well-known. Another weakness we noticed was that the company has not yet paid out dividends to shareholders. This may deter potential investors and may weaken investor relations. The last area that could be improved is using money wisely, especially in the marketing area. In 2007, $1,538,476 was used for sales and marketing, yet there did not seem to be an expansion in advertising methods (marketwatch, 2007).

Opportunities seem endless for Rocky Mountain Chocolate Factory. First and foremost, the candy stores are located in areas that attract high volumes of people. "The Company currently establishes franchised and company-owned Rocky Mountain Chocolate Factory stores in three primary environments: factory outlet malls, tourist areas, and regional malls" (marketwatch, 2007). There will always be a flow of potential customers in these targeted locations. Another obvious opportunity is that the Company is currently planning and looking for a prime location to open a new store. A new store will be an opportunity for more income. The Company has also expanded, becoming worldwide instead of solely residing in the United States. That gives

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