Adelaide : a mini break
In this exemplar we take a mini break in Adelaide. I have been to Adelaide many times, and obviously have a positive attitude. I don’t think I have ever been there when someone doesn’t say that ‘ Adelaide is the city of churches’ and/or ‘ Adelaide was not settled by convicts’.
The marketing concept: philosophy, theory, and application [e-book] discussed the total product concept as the totality of what a customer ‘gets and gives’ in an exchange. However, consumers often mentally bundle a number of disparate total products into one aggregate consumption experience. Therefore, a tourism product, such as a visit to Adelaide, should be considered, by marketing practitioners, as an aggregation of disparate and distinct total products, mentally bundled together by the customer to form one aggregate customer experience.
For marketing practitioners the recognition of products as aggregate products may provide worthwhile insight and guidance – not just for tourism products but also in other situations where the product could be categorised as an aggregate product. As marketing is founder on the premise that organisations that best satisfy the needs [and often wants] of their customers are best placed to satisfy their own needs – understanding, measuring, and managing aggregate satisfaction may be of benefit.
In the case of tourism products the objective is to produce aggregate satisfaction that results in positive word of mouth referrals that generates new and repeat visitors to the destination.
Once a destination has been selected [I guess the big decision] there are a number of smaller decisions that need to be made – where to stay, what activities to book, hiring a car … etc.
Often visitors describe ‘their trip’ in holistic terms – as the sum [the aggregate] of all the exchanges – as the sum of all distinct transactions each one involving searching, consideration of alternatives, forming expectations and selecting. An aggregate product is the sum of a mental bundle of distinct products; for example – the flight to the destination, the ride from the airport, the hotel, the taxis and ubers, the shops, the meals, the parks, the atmospherics and services received. Aggregate satisfaction is remembered when the details of the individual total products becomes blurry – consider how often do you hear friends say ‘what was the name of that hotel we stayed at in …. ?’
Given the many options, it is also very unlikely that another visitor will select exactly the same exchanges, moreover, given that the service components are variable even if they did visit the same venues it is also unlikely their experiences will be the same. An aggregate products, such as a visit to Adelaide will involve co-creation [co-production] and to some degree the selection and the expectations formed will influence the degree of satisfaction with the aggregate product. This presents challenges for marketing practitioners involved with aggregate products.
Destination marketing is an example of an aggregate product – the sum of many total products and importantly it is the level of aggregate satisfaction that will create word of mouth, create brand equity, and ultimately delivers new and repeat visitors. Although it is tempting to take short-cuts, to miss the hard part [design, develop, deliver] and go straight to a promotional ‘selling approach’ it may result in overpromising and underdelivering against expectations and this will do long-term damage.
To compete in any market a strategic marketing plan and tactical marketing action plans are needed, which requires a unique product value proposition to be designed, developed and delivered, the next task is to communicate the UPVP to the appropriate market segment[s], and most importantly deliver on advertising promises to create visitor satisfaction. Fortunately, for Adelaide and South Australia there is more to experience than churches.
Adelaide Central Markets
a central part of Adelaide’s history and just as important today for locals and visitors
150 years ago a group of South Australian market gardeners began a small market in Adelaide. Today, with around 70 traders, the Adelaide Central Markets is one of the largest retail markets in Australia. The traders specialise in fresh fruit and vegetables, meats, seafood, poultry, cheese, wine, olive oil, and nuts; in addition there are a number of cafes, bakeries, health food shops, and gift ware.
As you would expect, South Australian produce is showcased. For wine lovers South Australia is home to some of the finest wines and a good range is available. Although famous for their wines this combination of soil and climate is also ideal for olive oil and customers can be seen returning empty ‘flagons’ for refilling – after all markets are about saving money. With the coastline of the Great Australian Bight nearby – a good variety of fish is also available.
According to the Adelaide Central Markets website some 9 million people visit the markets each year.
Although I arrived at opening time and customers were few, many of the traders had been hard at work for several hours. The forklift drivers were delivering pallets of produce, traders were busy unpacking and arranging the produce, cash registers were being sorted, signage rearranged, empty pallets and cardboard boxes arranged for collection, floors swept and the traders were greeting their workmates and putting on their customer faces.
One fruit and vegetable vendor stated that his day starts at 4:00am in the auction rooms. He, loved the auction rooms, and stated that even though the traders all compete for business in another way they all collaborate. He went on to state that the attraction of the Adelaide Central Markets is that shoppers like to wander from vendor to vendor looking to save a few dollars here and there.
Another fruit and vegetable vendor stated that ‘many shoppers like to spread their business across their favourite vendors’. ‘buying something here and something there … I think it is also partly a social thing … you get to know your regulars’.
During various conversations, vendors who knew my intentions to collect information, stated that ‘times are tough, margins tighter than they have ever been, wages are rising, customers more discerning and more inclined to haggle, and some pay little respect for the fruit and this increases wastage’. One stated that ‘the face of Adelaide has changed and so has the protocols of buying – some people just don’t know how to be respectful’.
When asked about the visitors, another shopkeeper stated ‘at times it feels like we are like a circus attraction – where people come for a look, maybe – because it is free, maybe – because it is a cool place on a hot day or a dry place on a wet and windy day, many want the market experience but never even buy a coffee … I would be a rich woman if I had a dollar for every time my picture was taken’. When I stated ‘that is price of being beautiful’. She just laughed.
They come to shop but also to attend the regular events that are designed to make the Adelaide Central Markets a shopping experience.
Have your say
Have your say polls invite readers to participate in polls as part of the netnographic approach.
After reading this activity 95% of participants in this survey felt that on reflection a visit to Adelaide is the sum of a number of disparate total products and in the post-purchase could be considered an aggregate product.
Furthermore it was the aggregate nature that was the central to the shopping experience and the selection of products.
an iconic family owned and run business
More often than not there is a steady procession of businesses starting up and then closing – generally, a new business will start with great optimism, however, in time the daily grind erodes the enthusiasm of many and the smiles becomes scowls. The lease agreements that were signed with the promise of financial freedom often become a mill-stone of debt and a sentence that needs to be served.
‘What this!!!!’ I hear you say. ‘As a marketing scholar – are you not meant to chant the benefits of building a business and building a brand?’
The reality is that long-term business success stories are rare. In this exemplar we explore a family business that has survived for over 100 years – an exception and from a marketing perspective worthy of closer inspection. Like other successful family businesses, this business has a enduring philosophy – one that guides organisational values and provides a sense of belonging that staff find comforting.
What is often overlooked is a simple axiom of business – if your organisation provides exemplary ‘service’ to your customers then your customers will reward your business by providing a service to the organisation. A service that will increase sales revenue, reduce the cost of sales [as a percentage of sales], and build the value of the business.
There are exceptions
Haigh’s Chocolates based in Adelaide, South Australia, is a fine exemplar of an Australian family owned and managed business. Established in 1915, Haigh’s Chocolates is Australia’s oldest family-owned chocolate producer, manufacturer, and retailer. I have visited South Australia many times for both business and pleasure and no visit to Adelaide is complete without a visit to Haigh’s to purchase a treat for the family.
Today Haigh’s Chocolates have stores in Adelaide, Melbourne, Sydney, and online.
When you enter a Haigh’s shop you experience the aroma of chocolate. Spend a few minutes in a Haigh’s shop and you are likely to hear other shoppers comment on the aroma; the staff, will smile and say that ‘unfortunately’ over the years they have become accustomed to the smell of chocolate.
The staff may no longer smell the chocolate but they know this is a ideal sales-conversation starter. As a person who is curious, from a marketing perspective, I will use this opportunity to ask ‘how long have you been here? What I have discovered is that staff are loyal and proud to work at Haigh’s – many have worked there for considerable time. As you wander through a Haigh’s shop you can’t help but be impressed by the presentation of the products and the professional-friendliness of the staff.
Although a certain degree of luck is needed – it is an axiom of business that success is not reliant solely on luck. Haigh’s have had some degree of luck but they have had droughts, wars, financial depressions, political events, de-population, and changing consumer demands to manage. What marketing practitioners call – situational factors.
In a comprehensively research and beautifully written and presented book, Barbara Santich documents the history of Haigh’s; the release coincided with the 100-year anniversary of the opening of their first store in the iconic beehive building in Adelaide. What is clear from this historical record is that the founder Alfred Haigh was driven by a passion for customers and the art of business. His success was achieved after a number of business ventures, which in hindsight appear as the stepping stones of the business – prior to starting Haigh’s he was learning through trial and error and evolving his business model. We must keep in mind that South Australia, like all of Australia, was just coming together as one country, it was a new frontier, a harsh environment, and to a great extent isolated from the world. Given that transportation lacked the sophistication of today and refrigeration was in its infancy; if South Australians were to consume the luxuries of confectionary then they needed to be manufactured and sold in South Australia. At the turn of the 20th century, South Australia was experiencing a period of population growth as a result of increased agriculture and mining activity.
Then in 1914, Australia entered the first world war, for South Australia this created conflict as there was a strong German heritage and community. In a spirit of over enthusiastic patriotism consumers were encouraged to boycott businesses that could be identified as German, including the business of German trained chocolatier Carl Stratmann. In 1915, Stratmann, sold his business to Alfred Haigh and this included recipes, a library of books, chocolate moulds, trademarks, and the expertise of his staff.
Marketing historians are generally well acquainted with history and evolution of chocolate. An evolution from chocolate for drinking to chocolate for eating. Many of the most loved chocolate brands of today can trace their history to the pioneers of chocolate – for example – Coenraad Van Houten, François-Louis Cailler, Joseph Fry, George Cadbury, Rodolphe Lindt, Henri Nestle, Jean and Theodor Tobler, Milton Hershey, John Mars, Pietro Ferrero.
Perhaps it is the magic of chocolate, nevertheless, it is worth noting that the early business philosophies of chocolate manufacturers, including Haigh’s, was very enlightened not just for the times but also by today’s standards and very much in keeping with the marketing concept. Employees were viewed as a talent to be nurtured; that satisfied employees were viewed as the means of achieving satisfied customers. A search of George Cadbury, for example, would reveal that employee welfare extended to housing and community. Interestingly, chocolate brands are a great example of brand equity; a search of the company Mondelez International will reveal that whilst chocolate brands were building sales and loyal customers through product leadership they were also building valuable and attractive brands – this has resulted in a number of well documented takeovers in the last 50 years.
Such was the innovation that, Alf Haigh could look to overseas chocolatiers to get inspiration for new products. However, Santich (2015) highlights that Alfred Haigh was an innovator and invested in new machinery and people, in addition he was an astute property developer/investor. He was an active participant in the South Australian business community and an advocate for ‘Made in Australia’. Following the death of Alf Haigh at 55 the role of Managing Director passed to his son Claude Haigh. He was the right man for this period a steady hand that steared the company through a period marred by the great financial depression and then the second world war. A time of austerity when chocolate confectionary was regarded as a rare treat and consequently sales and employment numbers fell. As is generally the case in times of reduced demand, product lines were rationalised.
Santich (2015, p.150) provides an insight to Claude Haigh:
“Know your product and your business. Maintain control, avoid sleeping [business] partners. Choose locations wisely – the more distant the less chance of success.”
Following the war and the lifting of rations prosperity and demand returned. New production technologies were implemented, one in particular stands out. Even for Australia, Adelaide is particularly hot, under some conditions chocolate production had to cease. In the post-war this challenge was overcome by the introduction of a refrigerated production line.
The post-war period saw the rise of cinemas and new outlets were established to capitalise on this growing past-time. For a number of years, cinema outlets were an attractive business proposition, however, as marketers know most products are subject to a life cycle and the adoption of television greatly impacted on sales – Haigh’s exited the cinema outlets and then expanded to Melbourne and later Sydney [a shop in Perth opened but due to extreme temperatures and a poor location it was shut down].
John Haigh became the next managing director [son of Claude]. Prior to becoming MD John believed that to survive and prosper Haigh’s needed to be a best satisfying organisation – being at or above industry standard was not sufficient. As a young man he recognised the Swiss as the masters of chocolate production and wrote to Lindt Chocolates and John was offered a position as an intern. Interestingly, even though Lindt were aware that he came from an Australian Chocolate Family they provided him with access to chocolate making processes and intellectual property gained over generations. An indication of Lindt’s values is that they paid John Haigh an allowance during his internship. John recognised that quality was the sum of the qualities and he believed that this required control over the entire production process. He soon began to source beans from the finest producers. From Switzerland he visited London and New York to study chocolate retailing.
In time, John became chairman and his sons, Alister and Simon, took over as joint managing directors. A hallmark of Haigh’s is a quest to better serve the customer, to evolve as an organisation, and introduce products that meet the dreams, desires and demand of their customers.
New packaging and store layouts were refreshed to reflect a premium product. New locations were selected in iconic heritage buildings to reflect brand associations and the organisation’s roots t the beehive building. New products were introduced to cater for changing consumer tastes. Factory tours provided an opportunity to build brand awareness and a factory outlet shop provided another retail opportunity. Seasonal and special event products were introduced to provide gifts. An online presence has been established.
Whilst many things have changed – Haigh’s Chocolates have an eye on the future but also an eye on the past. There is a focus on the values and a maintenance of the artisan skills that made Alf Haigh successful – there is a commitment to creating an exceptional customer experience.
A number of situational factors [positive and negative] are outlined in this exemplar, identify the situational factors and consider how the situational factors would have provided opportunities and threats for management.
It appears as if some of the situational factors that the organisation must consider would also need to be considered by consumers. Consider this and outline your thoughts.
Search George Cadbury and discuss the enlightened business philosophy that contributed to the organisation’s success.
John Haigh was prepared to implement an augmented product strategy in the belief that customers would be willing to pay a price premium for quality. In your opinion how crucial was this decision for the organisation.
Given Australia’s climatic conditions, the vastness, and often isolation and Haigh’s focus on quality – what are the online delivery challenges that must be managed.
Santich, B. (2105). Enjoyed for generations, Mile End, South Australia, Wakefield Press.
Special thanks to:
- Fiona Krawczyk [Haigh’s Marketing Manager] for her time and assistance.
- The staff at Haigh’s Chocolate shops for their hospitality and dedication to making an outstanding product and building a great Australian brand.
- Barbara Santich for creating a magnificent book on the history of Haigh’s.
Perth visitors to Adelaide will often buy a gift of Haigh’s Chocolates for family and friends. In your opinion why is this gift so popular?
east end cellars
designing, developing, and delivering a unique product value proposition
One business that is clearly focused on customer satisfaction is East End Cellars.
I stumbled upon East End Cellars when wandering around the East End of Adelaide. I have been to the East End precinct on previous visits, but, felt the need to do a little update of the area – new places open – others close their doors – and it is a good place to trend-watch. To continue to attract customers, a precinct needs to be a little collaborative with the right mix of businesses and variety. After my wanderings, I concluded that the east end of Adelaide is home to a nice mix of cafes, pubs, fashion, and mixed businesses. Within the precinct the East End Cellars caught my eye, not because it is a fine wine retailer, or a cafe, or a restaurant but because it all three.
Atmospherics are always important. The East End Cellars have walls that are tiled with wood wine boxes, clear black and white chalkboard signage to give a ‘bottle shop’ feel, and product displays that create interest – all the elements combine to create an interesting retail experience. I made a mental note to revisit the East End Cellars and find out more. Coincidentally, later that day I found an excuse to visit for the second time, this time to have a coffee with a marketing colleague.
Sitting at an outside table, the friendliness of the staff was the first thing that I noticed; the staff went out of their way to engage with their customers in a manner that could be described as social chit-chat. In doing so they acknowledged their customers and created a welcoming atmosphere. This is important as often customers can feel a little ill-at-ease when visiting an unfamiliar place – and social chit-chat helps to ‘break the ice’ and create a better customer experience. PLUS a customer who is relaxed and feels appreciated is more likely to accept staff suggestions and increase their spend – win-win.
As we waited for our coffee, I noticed one of the staff politely opening a door for a delivery person trying to negotiate a two-wheel trolley, and then, within a few minutes, the same person opened the door for a customer – from a marketing academic’s perspective good manners suggests [ggod parenting] good staff selection, good training, and an organisation that has a quality customer experience as central to their organisational philosophy. I noticed another staff member engage with a customer, possibly a regular, with social chit-chat – the exchange lasted just 15 seconds but the smiles lasted longer.
As we drank our coffee and our conversation unfolded, we discussed the atmospherics of the shop and I realised that there was more to the business – after an enjoyable coffee my colleague and I explored the shop and took a few snaps.
In my hotel that evening, I checked out customer reviews on social media and it became apparent that this was a place where people caught up with friends for an early morning coffee, for lunch or a meal, for drinks a little later, or simply called in to purchase an interesting bottle of wine. It appeared that the East End Cellars adapts itself to the time of day and the evolving needs of their customers. When we consider the total product and in particular the product components [goods, services, ideas, experiences, people and place] it is apparent that East End Cellars heighten customer engagement through frequent and regular events – and then amplifies the event though social media.
Here are some typical social media comments:
I love this place. Friendly knowledgeable staff, great selection of wines and the new chef Georgie makes great dishes. Highly recommend this place.
Awesome! The wine selected by our waitress was amazing. The cheese platter was delicious. The afternoon was memorable.
These guys nail it! Beautiful and cozy setting, extensive selection of wines, and simple but delicious boards and dishes to pair with your drinks. Staff is super friendly and knowledgeable as well. I’ve spent three days in Adelaide, and been there three times for my daily hour of enjoyment!
When exploring social media I generally rely on my understanding of marketing tools – such as SERVQUAL; it helps me get a better understanding and provides better analysis of social media comments. SERVQUAL is discussed in detail in the e-book, many marketing textbooks, and some journal articles. I tend to look at the ten areas, which are: reliability, responsiveness, competence, courtesy, communications, credibility, accessibility, security, understanding, and place tangibility. Clearly, from social media comments, East End Cellars are managing the key areas of SERVQUAL particularly well.
One evening I went back to the East End precinct with a few friends. This time we chose the Mother Vine Wine Bar located on the other side of the lane way from the East End Cellars. The food, the local beers, and the service was excellent. It was only later in the evening when searching social media did I realise that Mother Vine was the sibling of the East End Cellars – in hindsight that made sense.
Social media comments on Mother Vine provide an insight, here is one:
We’ve been visiting the East End a bit more than usual lately, & its difficult to resist gravitating to this great venue. It wears the label of sophisticated wine bar with ease, with offerings ranging from an interesting range of internationally sourced sherries to local wines & beers. The small food plates are designed to share and are unusual enough to talk about while enjoying. … Service is understated and friendly. Great place for the beginning, middle or end to an evening. I will just keep coming back for as long as they keep up this lovely combo.
On my last day in Adelaide I returned to the East End Cellars, it was around 11:30am, and the weather had warmed considerably and I settled for a table inside. I asked for a coffee and a glass of water and was provided with a bottle of sparkling water and then a coffee.
I explained that I wished to create an exemplar for my website and asked if I could take some photographs and with a lovely smile was told ‘of course you can’.
During this visit I observed the same friendly staff that I had observed previously and recalled similar how this is a consistent theme on social media. Conscious of the heat outside I took my time enjoying the coolness of the shop and ‘consumer watched’. Clearly locals and tourists have have discovered the East End Cellars [and the Mother Vine] and this focus on designing, developing, and delivering a unique product value proposition for a selected marketplace produces episodic satisfaction [one customer one episode/transaction] which produces cumulative satisfaction [one customer all transactions] which produces collective satisfaction [all customers all transactions] and ultimately creates brand equity for the organisation[s].
BUT WAIT THERE’S MORE – The east End Cellars and the Mother Vine were not my only consumer experiences. The key to brand building is that it is not what an organisation communicates but what your customers communicate. On a visit to any destination there are many episodes where satisfaction can be evaluated, when episodes are combined this becomes the cumulative satisfaction of one customer and when all customers are considered this becomes collective satisfaction. However, when all the different customer experiences are collected – the evaluation of all customers regarding their visit to Adelaide then this is aggregate satisfaction and that should be the goal of all tourism authorities. Remember if it is not measured it can’t be managed.
I took one last look around the city, captured a few last-minute photographs, returned to my hotel, grabbed my bags and headed to the airport. It is always a pleasure to see business being done well.