| Assessment 1 – Research Case Study Report MKTG6002 Marketing Asmaa A Ghuneim 00143789T Dr Al Marshall Words Limit: Words Date of Submission: 14 Apr 2018 |
Table of Contents
Introduction ………………………………………………………………………………………………………………………….. 2 Background …………………………………………………………………………………………………………………………… 2 Macro Environmental Factors………………………………………………………………………………………………….. 4 Micro Environmental Factors…………………………………………………………………………………………………… 6 Direct and Indirect Competitors ………………………………………………………………………………………………. 9 Consumer Behavior……………………………………………………………………………………………………………….11 Bibliographies & References ………………………………………………………………………………………………….. 13
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Introduction
In this paper, Donald B Company is selected that is a great leader of chocolates in the confectionery market. This company has retail stores for providing better services to the customers timely. The micro and macro environmental factors of this company will be demonstrated in this report. This report discusses the background of the company and its structure. The main purpose of this organization is to make an effective brand in the Australian chocolate confectionery market. In this report, this company has direct and indirect competitors in the marketplace that is described in the details. The consumer behavior is effective of this company that help to develop the brand in the competitive market (Afoakwa, 2016). This company uses the parameters that help to develop its performance at the global level. This organization focuses on the chocolate confectionery stores and online stores for giving better services of the products to the customers in the future.
Background
The background of Donald B is based on the size, segment, growth and trend that help to identify the consumer in chocolate market. This information is given below in detail:
Size: Donald B has an effective and competitive position with its brand in the Australian chocolate confectionary manufacturing. The size of this company is effective because it has developed the online retail stores for providing qualitative products to the customers in the different areas of the country (Bozkurt, 2016). It has different kinds of products like chocolate party trays, chocolate soft center assortment, chocolate peanut butter cups and solid chocolate break up bar that are provided to the customers. This company uses the cellophane wraps for packaging the chocolates that help to retain the customers on the large scale.
Market Segment: Donald B implements the marketing strategy to segment the market. A global company provides milk products, chocolates and confectionery goods for targeting the
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customers. This company segments the market in the different ways like geographic, demographic and psychographic. In geographic way, this company segments the area in the different zones to offers its products to the customers. The customers are satisfied with services of this company because it gives the facility of qualitative products in any environmental condition like hot or cold. This company also divides the market as per the demographic area. The market is segmented as per the ages of the children that includes 1 year to 10 years old of children (Marjanova Jovanov, Davcev & Boeva, 2016). This company identifies their taste and offers the products as per their interest to increase their satisfaction level.
In addition to this, this company segments the market as per the psychographic area. This company provides a variety of milk products and confectionery goods according to lifestyle and personality of the consumers (Sheth & Sisodia, 2015). The service of this company is attractive to the customers where they consume the products and enjoy the life. In the competitive market, this company touches the customers due to creating products, services and channels.
Growth: Donald B Company has achieved the goals of strategic plan in the emerging markets. It is a global company that has developed the retail stores and online stores and increased the sales turnover. This company has achieved the potential profit due to increase in sales turnover in the confectionery market. The position of this company is effective to establish the business in the Australian chocolate confectionary market. This company has grown with the quality services globally. The growth of this company is based on the marketing strategies and digital marketing (Chiambaretto, Gurău & Le Roy, 2016). This company has two chocolate confectionary stores such as Melbourne CBD and Chad stone Shopping Centre. It also focuses on the chocolate confectionary retailing and develops the business in the different areas in Australia.
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Trends: In the Australian confectionery market, Donald B become a trend due to providing better services that help to develop its performance. This company has opened the retail
stores in the different zones and developed an effective brand in the competitive place (Kaufmann, 2014). In the future, this company will focus on the distribution channels like 3rd party owned chocolate confectionary stores and online store to grow the business level in Australia.
Macro Environmental Factors
The macro environment is the external environment factors that influence the strategies, decision-making and success of the business. The PESTLE analysis is conduced to identify the culture and consumer preferences of Donald B at the global level (Talamini, ET. Al, 2013). These factors affect the consumer chocolate market positively and negatively. Political Factor: In the Australian market, this company focuses on the supply and price strategy to maintain the structure of the business. The position of the company is affected due to political stability. The government charges the value-added tax on the goods that increase the prices of chocolates and reduces the sales of the business (Baker, 2014). The managers to manage the finance and investment of the company that helps to increase the consumer chocolate market use the marketing plan.
Economic Factor: The profitability level and sales turnover have increased of the company. This company has developed the business with the providing milk products and confectionary goods. Two competitors like Cadbury and Nestle affect the position of the company in the market. This company has decided low cost on the products that would be helpful to increase the economic growth rates. The strategic plan is use by the organization that helps to create brand awareness among the customers (Kotler, 2015). It can be say that the company can expands its business in the Australian market to establish the new business with the use of effective strategy.
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Economic
Social
Political
PESTLE
Technological
Environmnetal
Legal
Diagram 1: PESTLE Analysis
Social Factor: Donald B has branded products that are sold in the different communities of
the country. The company produces the chocolates to the children and satisfied their needs wants. If this company operates the business in the different countries then it faces the problems related to the different culture, languages, beliefs and misunderstanding (Cameron, et. Al, 2013). The company needs to understand the behavior of consumer for developing the effective brand in the market.
Technological Factor: The Company uses high-tech machinery to produce branded products at lower prices. This company has adopted new machinery for packaging the
chocolates and promoted its products through the social media. It also focuses on the e- commerce platform for developing the brand in the competitive place (Squicciarini & Swinnen, 2016). The digital technology is implemented by the organization to create new and innovative features on the website. This technology attracts the customers to buy the chocolates through the online stores. The social media is helpful to advertise the products for
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targeting the potential customers. These perspectives are helpful to get competitive advantages in the company.
Legal Factor: Donald B has a unique position due to high-quality products in the competitive market. This company has developed the business in the different area, but it is affected by the legal standards that can also influence the business position and responsibility of producers. With the use of digital marketing, this company has to follow some online legal standards and laws to promote it within Australia (Zurzolo, et. Al, 2013). These laws and regulations have a great impact on the profitability of the company. This company needs to follow Australian tax structure and needs to pay tax to the federal government of the company.
Environmental Factor: In the marketplace, every brand needs to develop the well environmental image. Donald B includes the different type of schemes and programs to
develop the environmental performance in the Australian market. The company produces high-quality products with the use of technology and delivers for packing the products with cellophane wraps in plastic trays (Mintu-Wimsatt & Winston, 2013). The employees give full efforts for achieving the goals. The management team motivates the employees by increasing their performance level. It develops the relationship between the customers and satisfies them for purchasing the products through the online stores and chocolate confectionary stores in the future. The environmental performance of this company is effective that increases the efficiency of chocolate confectionary manufacturing in Australia.
Micro Environmental Factors
In the organization, microenvironmental factors help to improve the brand and get success in the long term. Microenvironment has a direct impact on the business activities in the marketplace. These forces are strategy tools that help to make attractiveness in an industry. These factors affect the customer relationship and ability of the company. The
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Porter’s five forces help to identify the competitive position of the company (Wilson, 2015). Donald B is focused on the Porter five forces to get competitive advantages globally.
Rivalry
Threat of New Entry
Porter Five Forces
Barganining power of Suppliers
Barganining Power of Buyers
Threat of Subsitutues
Diagram 2: Porter’s Five Forces Analysis
The Threat of New Entry: The entry of new competitor can be difficult to establish the
business in the Australian consumer confectionery market, because there are various competitive companies like Cadbury, Nestle, Lindt, Ferrero Rocher, Donald B and Darrell Lea. These companies create competitive position when a new company starts the business in the chocolate market. In this market, a new company or social enterprise can enter if it has high initial capital, a wide range of products, strong distribution channel and experience of the market (ElQuliti & Khashoggi, 2017). The position of Donald B is attractive that help to retain the customers because it uses marketing techniques. It is a smaller retailer that provides various milk products and chocolates in Australia. The position of this company is similar to Darrell Lea but lower than Cadbury and Nestle in the Australian chocolate confectionary manufacturing.
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The Threat of Substitutes: In the market, there are various substitutes of chocolates that affect the production. Many companies copy the confectionary brand of chocolates like
Nestle Kit Kat, Cereal bars and Fruit bars and provide at a cheaper price in the market. Donald B provides high-quality chocolates and creates a good environment for the customers. This company provides sugar-free products and healthier products where customers consume the products in the different communities of the country (Larina, 2017). This company is a smaller retailer of chocolate comparison to other competitors that provides branded products at a reasonable price to the customers in the chocolate market.
Bargaining Power of Buyers: Donald B has a large number of buyers and satisfies by providing branded products in the world. It uses pricing strategy to decide the price of the products and delivers at the right time. At the marketplace, it communicates to the buyers and increases the satisfaction level. The packaging of products is effective that attract the buyers at a large scale. But, there are many competitors that offer the same type of products to the buyers at a lower cost. These competitors make the cause of customer loyalty alteration where this company feels difficulty to satisfy the buyers (Kaufmann, 2014). In this situation, the company uses strategy and fulfils their requirements and satisfies them in an accurate manner.
Bargaining Power of Suppliers: This Company creates a positive relation to its suppliers and motivates them for providing better services to the customers. It communicates to the suppliers and provides proper guidelines to develop the business in the consumer chocolate market. In the organization, the managers use marketing techniques to establish a new business in the different location of the country (Marjanova Jovanov, Davcev & Boeva, 2016). The company develops the quality of the products and decides the actual prices on the products. The quality of products makes the strength of the company in the consumer confectionary market. The supply chain management is attractive to supply the products
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quickly. This company focuses on the position of the suppliers and gives the compensation to give better efforts in the future.
Rivalry among Existing Competitors: Australian chocolate confectionary manufacturing includes some competitors like Nestle, Mars, Cadbury, Lindt, Ferrero Rocher and Hershey that create competitive situation due to having 42% share of global market. These competitors have established the confectionary brand against Donald B. In the marketplace, this company develops a new range of the products with the use of marketing techniques. In the Australian market, this company has a strong position in the chocolates and milk products, because all the competitors sell same types of products through the online stores and confectionary stores (Mohos, 2017). This company focuses on the new initiatives to promote the new products and achieves the targets globally. The competitors have high growth rate and increase position in the confectionery industry, where the new company cannot enter to establish the business easily.
Direct and Indirect Competitors
In the Australian chocolate confectionary manufacturing, Donald B has direct competitors like Nestle, Mars, Hershey and Cadbury that create the competition to the indsutry players. These direct competitors increase the competition where the new company cannot enter to establish the business in the market. The organization increases the price due to competition that affects the consumer chocolate market (Sheth & Sisodia, 2015). It also reduces the sales turnover and profitability in the competitive market.
Mars: This company has global brand chocolates like M&M, Starburst, Snickers, 3 Musketeers, Dove and Milky Way that affects the market of Donald B. Mars is a private company, but the market share was 29.5% for chocolate market in the United States in 2014. It provides the quality services to the customers at the reasonable prices (Gornall, 2015). The
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customers give the order to buy the tastier and healthier food in their life. It affects the prices level and consumer loyalty of Donald B.
Nestle: In the consumer chocolate market, this company plays a vital role, because it provides branded chocolates such as Kit Kat, Butterfingers and Crunch bars to the customers. These brands names create the competition against Donald B where it cannot satisfy the customers in a proper way. In the chocolate market, it has 5.8% market share in the United States (Ikpefan, et. Al, 2014). The position of this company was 6th in 2014 because it sold out $7 billion chocolate products and included $4 billion from America.
Hershey: In the chocolate industry, the market share of this company was 44% in the United States in 2014. This company has well-known brands like Reese, Jolly Rancher and Twizzlers in the United States. It is a great distributor of chocolate products in the competitive markets (Smith, 2013). Donald B provides branded products through confectionary chocolate stores, but it cannot achieve a ratio of profitability.
Cadbury: It is one of the most confectionery brands in the world that includes Dairy Milk, Crunchie, Falke and Curly Wurly. This company has a leading position with 30% market
share in Australia. The company had $15 billion sales in 2006 due to its strong distribution channel (Rutsaert, et. Al, 2013). This company influences the position and brand of Donald B in the competitive place.
There are indirect competitors that create the competitive image against Donald B in the Australian chocolate market. It includes Kinh Do Corp, Bibica, Lotte, Hai Ha brand of chocolates.
Kind Do Corp: It is an indirect competitor of Donald B that provides products in two categories like growing category includes cracker, moon cake and ice cream and saturating category includes cookies, candies and chocolates (Welch, et. Al, 2016). This company has 500 distributors and 200000 retailing bakery outlets in the world.
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Bibica: It is a popular brand because it provides healthy confectionery products. This company focuses on the candies, biscuits, chocolates and starch syrup (Nguyen, 2016). It has a strong position with distribution channels and 500 retail stores in Vietnam.
Consumer Behavior
In the marketplace, the consumer behavior is the actions and decision process of people that buy the goods and services for personal consumption in the life. The behavior of consumer has a unique position in the market because the companies create a good relationship with the customers and provide services. In the Australian chocolate consumer market, Donald B is a retailer of chocolate products that have become a great leader due to its branded products and services. This company identifies the consumer preferences and taste and fulfills their requirements with the providing branded products in the competitive market (Shekhar & Raveendran, 2013). Donald B has opened the online stores and confectionery chocolate stores in the different zones in Australia.
In addition to this, this company uses 4 pcs marketing strategy to make an effective position in the competitive market. With the use of marketing strategy, it develops the relationship to the consumers and provides better chocolate products at a reasonable price (Rödiger & Hamm, 2015). This company has enough knowledge of consumer behavior that helps to increase the business position in the Australian market. At the marketplace, it identifies the problems of the consumer and solves them with innovative or creative ideas that increase the purchasing power of the consumers. This company uses digital technology to develop the business area for getting competitive advantages.
There are various factors that are implemented by this company to target the customers in the competitive markets. This company creates an attractive image in their mind with the branded services.
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Product Design: Donald B produces the different milk products and chocolate products with different flavors and provides to the customers timely (Baker, 2014). This company designs the products with the use of new technology that creates attractive images in their mind. Price of the Product: It provides the chocolate products to the customers at reasonable prices. This company uses pricing strategy to set the price on the new products in a different way. It provides better services at an affordable price where consumers can consume the products in their life (Hartnett, Romaniuk & Kennedy, 2016).
Packaging: This Company has attractive packaging of the products that retain the customers on the large scale. It uses the cellophane wraps to pack the products in flat plastic trays
(Larina, 2017). It produces different products for children, adult and family member and delivers with effective packaging.
Place of Distribution: It delivers the products through the online distribution channels where the consumer can buy the products as per their requirements quickly. In the market, this company supplies the products timely and increases the satisfaction level (Checchinato, Lala & Vescovi, 2014).
Promotion of the Product: Donald B uses the social networks for advertising the chocolate products. It adds the unique features in the website and uploads attractive images of products for promoting the brand at the global level (Chiambaretto, Gurău & Le Roy, 2016). Positioning: In the Australian consumer chocolate market, the position of this company is effective due to its branded services. This company has become a great leader in the chocolate market because it develops a good relation to the consumers and satisfies them. (Hartnett, Romaniuk & Kennedy, 2016)
As per the above discussion, it can be concluded that Donald B is a good leader in the Australian chocolate market. This company has used the marketing strategy to develop the competitive position in the marketplace.
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