Discussing the buyer behaviour in relation to the chocolate products

Discuss about the Highlight Grasp Of Effective Marketing Practices.

The purpose of the paper is to show the significance of marketing in modern businesses and highlight the grasp of effective marketing practices. Marketing in recent time has drastically evolved and it is one of the critical parts of the business administration. When an organisation designs the marketing plan; assessment of the consumer behaviour and evaluation of macro and microenvironment is very important (Solomon et al., 2014). Marketing environment analysis helps the organisation to understand the opportunity to apply the knowledge to develop the effective marketing strategy. Donald B is chocolate product maker and he has two stores in Melbourne. Donald B wants to expand the business nationally and internationally. Donald B also wants to compete with larger rivals producing the chocolate products. This assessment strives to develop the Marketing Environmental Analysis and understanding the advantage of opportunities along with potential threats.

Chocolate industry in Australia is expected to grow 7% between 2019-2013 as Australian market has been facing high demand of the chocolate and foreign chocolate makers are increasing in Australia chocolate market (Gallo et al., 2018). In Australia, almost 68.4% of Australians who are aged above 14 consume chocolate in an average four week (Gabrielli & Baghi, 2016. Among the Australians, chocolate bars are more popular; followed by boxed chocolate and blocks. The buying behaviour of the customers differs in chocolate as young generation likes to have the boxed chocolate to gift someone. Almost three-quarters (73%) of Australian customers who purchase them on average four weeks eat them (Miner, 2018). Some of the best selling chocolate brands in Australia are Cadbury, Ferrero Rocher, Lindt and Cadbury Roses.

Best-selling chocolate brands	Number of Australians who buy per 4 weeks Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	% of buyers who eat the same brand per 4 weeks
Cadbury Favourites	610,000	65%
Lindt Lindor Balls	585,000	74.2%
Ferrero Rocher	535,000	74.3%
Cadbury Roses	335,000	63%

Table 1: Australia’s best selling chocolates

(Source: Ibisworld.com.au, 2018)

In Australia, 89% of the people buy chocolate from the open market or from the retail shops; not from the chocolate confectionary. In a Chocolate retail market in Australia is considerable as it had a market value of AUD 3,900 m with 521,000 tonnes being sold (Bellucci, Mari & Picciaia, 2017). The customers in Australia make a purchase of chocolate as chocolate tastes good and smell good. Chocolate feels good as it is the result of the brain releasing chemicals in response to each chocolate experience (Noori & Najafpour, 2016). The chocolate purchase is affected by several factors in Australia and some of the factors are friends and acquaintances, a brand of chocolates, price, personal experience, health restrictions and allergies, nutritional qualities and country of origin. Michelle Morgan makes the best chocolate in Australia and most purchased chocolates in Australia are imported and high quality. Small chocolate manufacturers play a significant role in chocolate industry and customers first come up with stimulation of having something sweet. The customers search for the internal search as it is the memory of the customers (Cole, 2016). Australians customers do the external search as they also do the comparison of shopping. Australians do the evaluation of alternatives available in the market and customers’ choices can be altered based on the alternatives in the market.

Analysing the microenvironment

Maximum power of the suppliers in the market can diminish the firms’ profitability by increasing the prices or decreasing the quality of the suppliers’ product. Profitability of the organisation can be reduced if an organisation cannot recover the raw materials expenses. Raw materials needed in chocolate industry are the flavours, extra cocoa butter and dried milk powder (Nestle, 2016). The local suppliers deliver the flavours and the dried milk powder to the manufacturing plants of the chocolate company. Cocoa is mainly produced in tropical climate and maximum of the companies are forced to import cocoa.  Cocoa suppliers of chocolate companies in Australia are the international firms and national firms as well (Pappas, 2016). The wholesale chocolate and confectionery suppliers in Australia are Fudge Man, Gourmet Confectionery, Belgian Delight, Gourmet Chocolate and Rockey Road. Suppliers’ relation in chocolate industry is the B2B relation; suppliers’ power in chocolate industry lies in concentrated suppliers’ Group, suppliers’ product is very essential, suppliers’ product is differentiated and no substitute products are available in the market (Khare, 2015). The chocolate companies can face a justifiable threat to forwarding integration; therefore, suppliers of the chocolate industry in Australia have bargaining power. The suppliers are limited in the chocolate industry; therefore; the bargaining power of suppliers is high.

Marketing intermediaries act the link among the distribution process. In a chocolate industry of Australia; distribution process is very important as intermediaries play connecting role among the different channel partners (Badgaiyan & Verma, 2015). In chocolate industry; intermediaries are large as the chocolate companies need various raw materials from local and international agencies. Wholesalers assist to move raw materials between retailers and the producers. Cocoa buying firms are the main intermediaries between the farmers and the chocolate industry. The chocolate companies set the fixed percentage of the marketing budget allocated for the chocolate to be sent into the special funding programme to be redistributed to both farmers and the producers. In cocoa production, intermediaries play a major role to fix up the price. As stated by Kwok et al., (2016), the intermediary has the role to enhance the efficiency levels to monitor the application of training and fertilizers.

As stated by Schumacher, Kems & Tiggermann (2016), the public is a group of people which may have potential interest in the organisation. Financial publics of the organisation are important as these relationships impact on the ability to obtain funding for the business. Financial publics include investment house, banks and stockholders. Media publics are extremely valuable and media publics carry the features, news, editorial opinions and they deliver them to the customers. In addition, government publics keep the eyes on regulations and laws which can affect the manufacturing production. Therefore, in the chocolate industry of Australia; the local public is more important which includes the neighbourhood residents and the community people (Greenberg et al., 2015). Businesses can usually appoint the community relations to understand the needs of the customers. Chocolate companies have the media publics to publish the blogs, newspaper, radio, magazines and television and social media networks to communicate with the stakeholders.

Summarising the competitors offering and target market

Donald B started the chocolate outlets in Melbourne and operators in the Chocolate manufacturing industry have faced the changing preferences of the consumers. The chocolate manufacturing companies are producing different chocolate based products like cocoa products, confectionery, crystal and glazed fruits, drinking chocolates, marshmallow and candied popcorn.  

Industry rivalry 

Industry rivalry is high in chocolate industry in Australia as there are many international players are available in Australia. Some of the large chocolate industry players in Australia are Cadbury, Arnott, Ferrero Rocher, Nestle and Mars. In addition, Hershey is another large chocolate company which sells a large amount of chocolate in Australia (Ibisworld.com.au, 2018). These products are mainly sold in the retail stores and in the shopping malls.

Some of the local chocolate companies have their own outlets and Donald B mainly faces the competition from the chocolate outlets. Monsieur Truffe is one such chocolate cafe owner which opens the mysterious door of chocolate as they sell chocolate products in Melbourne Brunswick East. Kakawa is raising the bar on chocolate making company in Australia and another large chocolate shop is Noosa Chocolate Factory. One of the famous chocolate manufacturing companies is Zokoko as this organisation has its own cafe and it sells in the open market as well (Gallo, Antolin-Lopez & Montiel, 2018). Therefore, chocolate industry in Australia has high competition. Substitutes in the chocolate industry in Australia are as large as many of the international and local companies have the market share. The local and international players advertise through online, social media and television media to attract the customers.

The threat of new competitors can pose threat to the existing competitors in the chocolate industry. The capital requirement in chocolate industry is medium and it is a profitable industry. Therefore, barriers to entry in chocolate industry in Australia are low (Moorhead, 2016). The chocolate industry in low threat of new entrants as the new competitors can look to achieve the profits.

Chocolate brands	Strengths	USP	Target customers	Offered products
Cadbury (International Brand)	Cadbury has large brand equity Strong brand recall Employee strength is large Premium quality	It is one of the biggest and trusted chocolate brand worldwide	Children and the young generation	Chocolate Santa, Chocolate snowman, Chocolate Calendar, Dairy Milk Mousse
Ferrero Rocher (International Brand)	It provides great taste An excellent brand name with high brand loyalty Good product packaging It available in leading malls and stores Famous international brand	This is famous as a gift item and it is whole roasted hazelnut which is encased in thin wafer shell filled covered with milk chocolate	Upper-class young generation	Milk Chocolate, Hazelnuts, Sugar, Plam oil and wheat flour
Zokoko	Zokoko provides a diversified chocolate option It is Australian based company It has its cafe where the customers can observe the process of making chocolate Zokoko chocolate has its own flavour	Zokoko sells the dark chocolate and it has its own cafe	Young generation and middle-income group	Alto Beni, Tranquilidad, Chapter, Goddess Milk
Hershey	Strong brand name as well as awareness Diversified products Strong public and social image Renowned for promoting various segments	It offers 100 types of various chocolate-based products	Young generation and middle-income group	Hershey’s Kisses Milk Chocolate, Hershey’s Chocolate layer, Hershey cookies

Table 2: Competitors’ analysis

(Source: Self-developed)

Australia ranks 53^rd in population worldwide and the unemployment rate in Australia 5.8%. Australia ranks 2^nd in Human Development Index and in corruption, it ranks 11^th (Davies & Kitchen, 2015). Literacy rate in Australia is 99% and the broadband uptake in Australia is 13.8%. In Australia, chocolate and confectionery food consumption are high as Australians like the taste of sweet. Age is an important factor in purchasing of the chocolate and aged generation in Australia takes almost 40% (Beckett, Fowler & Ziegler, 2017). Chocolate products are meant for the young generation. The male and female ratio at birth estimate is 1.01 in total; in chocolate purchasing; both the sexes have different needs in buying of the products. Income is a very important factor as upper and middle-class people purchase chocolates. Media gross household income in Australia is $80,700 in 2016 (Crichton et al., 2016).

Australia is politically stable, peaceful and prosperous country and there are three tiers of democratically elected government; which are federal, local and state. Australia is ranked 1^st in political freedom in Australia and press freedom in Australia is also low. Australia’s regulatory system is transparent which underpins the economic resilience.

GDP growth in Australia is 0.6% and the inflation rate is 1.8% (Baker, 2017). Average gross salary is AU$ 1,605 on a weekly basis. Chocolate industry in Australia has the revenue of AU$ 6 billion in 2018 and the annual growth of the industry is 0.7%. The chocolate industry provides the employment of 11,225 and in Australia; there are more than 340 businesses are there to deal in chocolate and confectionery (Kiseleva, 2017). Therefore, the stable economy will increase the spending ability of the customers.

Consumer behaviour is an effort to understand the buying tendencies of the customers. Australians have the tendencies to purchase the chocolate and social factors play an essential role to influence the buying decisions of customers. The customers may have the reference groups and they can be influenced by relatives and friends’ group. Immediate family members can influence the customers to purchase the chocolate-based products. The young generation buys the chocolate for the loved ones and the disposable income of the customers is USD 33,410 in a year (Lusch & Vargo, 2017).

Technology has changed the chocolate industry in production and packaging over the years; starting with the introduction of the new machines in the production of the dark and liquid chocolate. The chocolate industry has been using the social media in order to the promotion of the products (Lovelock & Patterson, 2016). The blending of the chocolate needs technological help which includes pathogen tastes system and filing patents.

Conclusions

It has been observed that marketing environmental analysis has cleared the scenario that Australia has a potential opportunity in the chocolate industry. Marketing environmental analysis is the key to understand the possible impact of external local, international and national factors of the small business. 68% of the Australian population aged over 14+ consume some kind of chocolate in an average four weeks. Australians like to have a chocolate infrequent basis and giving boxed chocolate is the fashion in Australia. In Australia; local chocolate brands like Zokoko and Lindt have their own chocolate shops. In addition, international brands like Ferrero Rocher, Hershey and Cadbury have their market share. Moreover, economic and demographic conditions prove that chocolate and confectionary companies have the potential to grow in Australia market.

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