Marketing Analysis Of Dairy Milk Oreo Chocolate In The United Kingdom Market - Essay Example

MARKETING ANALYSIS OF DAIRY MILK OREO CHOCOLATE IN THE UNITED KINGDOM MARKET Introduction Launching a new product in a new market is a challenging affair. Entrepreneurs and business organizations are in most cases concerned about the reception of the product in the market. Various worries that companies and individuals suffer while trying to launch products in the new market relates to the reception of the product by the customers, the ability of the product to satisfy the needs of the customers and the availability of substitute products in the market targeted. Subsequently, organizations have to develop marketing and promotional strategies that are likely to help them succeed in the new market. With the understanding that different factors act on customers whenever making their purchases, an organization should ensure that it not only meet the needs of the customers but also portray a good image to the people. Products in most cases fail, because of their inferior quality, but lack of innovation and creativity in the development, packaging and promotion stages. An entrepreneur could have a great idea, but due to poor implementation, could fail in selling that idea to the people. Food is one of the most sensitive businesses that whenever entrepreneurs consider investing in should get right. Understanding the needs of the target population is the best way of winning a new market. Dairy milk oreo chocolate, a new product launched in the United Kingdom so far has been a success. This was however through market research on the needs and tastes of the target population. Looking for a market niche and aiming at satisfying that market is the best way an enterprise can win the target population. Although the dairy milk oreo chocolate was never a household name, and as such, was unknown in the market, it is gaining popularity at a very fast rate. This essay is an analysis of the key success factors for the brand in entering and capturing the United Kingdom market. It will analyse the main contributing factors to the success of the brand in the United Kingdom market, as well as the main macro environmental factors affecting the operations of the brand. Key success factors for dairy milk oreo chocolate in the new market Product idea It is important to conduct a market research and finds a market niche or need to satisfy by providing the goods and services to the people (Zikmund & Babin 2013, p 1). A good market research provides the entrepreneur with the most viable idea and the best way of approaching the business. Introducing a completely new idea to a market is not only a tricky but also equally interesting undertaking (Yuece 2012, p. 7). While the idea could fail, if it succeeds, the enterprise is likely to do extremely well. First, it is important to consider the approach with which to use in order to win the target population (Kandogan 2006, p. 8). Cadbury chocolates with oreo developed products purposely targeting the UK market. The uniqueness of the brand, coupled with the value and taste makes it appealing to its customers. Even the ingredients used in the manufacture of milk chocolates, among them being cocoa solids 26%, milk solids 28%, full cream milk, sugar, cocoa butter, cocoa mass, milk solids, emulsifiers (soy lecithin, 476), and flavours appeal more to women than to men. Competitive advantage Oreo enjoys a competitive advantage over other brands in the market. Not only does the brand enjoy high levels of customer loyalty because of the competitive edge it has over its rivals, it also enjoys a wide customer base. With the increase in the level of competition in the current global business, organizations have to develop highly competitive business models. As customers increasingly demand for high quality goods and services, businesses have to establish proper working models that help in developing high quality products. In the current business environment, businesses and organizations should ensure a competitive advantage, which is part of an organization’s core competencies. Wheelen & Hunger (2012) define a core competency as “a collection of competencies that crosses divisional boundaries, is widespread within the corporation, and is something that the corporation can do exceedingly well.” Core competencies therefore ensure that a business performs exemplary well in its area of operation, thus improving its performance (De Loecker, 2011, p. 1410). Dairy milk oreo chocolate enjoys a unique brand with unique taste and highly satisfying results. People prefer the brand because of its value. Not only is the brand a high quality brand, it also gives customers the impression that they get the value for their money. Quality and uniqueness of products is the main advantage that dairy milk oreo chocolate has over other businesses. Differentiating the product from its competitors, and the unique oreo flavours specifically for the United Kingdom market would make the company more appealing to the customers. The brand, having unique features from other brands in the market is the main source of the brand’s competitive advantage. Critical success factors for dairy milk oreo chocolate Segmentation Market segmentation is the process of dividing a market into different meaningful, relatively similar, but rather identifiable segments or groups in the market (Agarwal, et al 2010, p. 20). With marketing mix, an organization’s marketing department knows the needs to target in order to satisfy this group of customers in an effort to maximize its revenues (Agarwal, et al 2010, p. 30). Customer segmentation allows an enterprise to develop products that satisfy the needs of every segment (De Loecker, 2011, p. 1409). Among the various brands in the candy business, dairy milk oreo chocolate has managed to practice a multi-segmentation strategy of its customers. The company separates its segments using a number of variables. Geographically, the brand uses a regional approach to segment its customers. In its geographical strategy, dairy milk oreo chocolate tries to appeal to the local population in order to win their respect and trust. With respect to this strategy, the brand focused on an aggressive marketing campaign for the various products, thus winning the trust of the customers. Most of the products specifically target this market by considering the tastes of the people. The inclusion of oreo in the chocolate was a strategy used by the manufacturer in capturing the United Kingdom market. The brand also demographically segments its customers in terms of their age. Although the young generation, considered as the biggest consumer of chocolates, the company saw the advantage of including elder women as an untapped market niche. Unlike other types of candy that are gender insensitive, the Cadbury strategically targets women as the dominant customers to its products Targeting Before engaging in any business, an entrepreneur should have knowledge of the kind of people to target. Cadbury, a company that focuses on manufacture of chocolates and other related products saw the untapped potential of the United Kingdom, the company embarked on a thorough research trying to find the most viable brand, which when introduced in the market would seldom fail. The idea of dairy milk oreo chocolate came as a game changer in the candy business. With the company targeting both the young and the elderly women, both in the upcountry and in those living in cities and towns, the company is likely to benefit from high profitability. Proper targeting has increased the demand for the product, with every retail store, big or small stocking the commodities. Its advertising campaigns too seek to target this unique segment of customers. The “Joyville” campaign, creating an imaginary land where workers enjoy manufacturing the products, coupled with the slogan by the company of an “organisation made to bring joy to people” increased the chances of the product appealing to the target population. Direct and indirect competitors for dairy milk oreo chocolate Positioning Dairy milk oreo chocolate operates in a highly competitive industry. There are many companies manufacturing candy and chocolates in the United Kingdom market. Among the top ten chocolate brands the United Kingdom, include Cadbury Dairy milk, galaxy, kitkat, malstesers, Mars Bars, Snickers, Areo, Cadbury wispa and M&M’s. Dairy milk oreo chocolate remains the top most preferred brand a mong all these. Additionally, the brand faces in direct competitors of substitute products such as biscuits. The company strategically placed its products at the heart of its consumers, thus winning their loyalty. Positioning involves the creation of an image in the mind of the customer through different methods such as creating a lasting image and good impression in their minds (Wheelen & Hunger, 2012, p. 124). Marketing strategy Promotions The company however, had to deal with the problem of targeting the right population, subsequently developing a marketing strategy aiming at creating awareness of the products. Realizing the flooded candy business, with a high demand-high supply market for milk chocolates, it saw the need to add yet another flavour, thus developing the milk chocolate with oreo. As such, it started a campaign aiming at teaching homemakers on how to prepare the food. It is important for an enterprise to provide products that actually meet the needs of the people. The advertising strategy of the product, coupled with its uniqueness in packaging and the pleasant unique taste made the product appealing to the people. The company, since the launch of the brand, has considerably increased its profitability in the United Kingdom market, against a highly competitive industry (Kandogan, 2006, p. 12). As Cant (2006, p. 12) points out, it is important to develop a marketing statement in line with the marketing strategy to aid in your marketing. Cadbury knows this very well. The creativity with which the company designs its packaging for the products is captivating to the target customers. The message used in the marketing campaign also has considerable effects on the mind of the target audience. For Cadbury, the choice of the slogan, “a glass and a half of full cream milk in every half pound” aimed at sensitizing customers that chocolates too contained milk. Not only should one take chocolates as part of fun, but also as a way of improving their health. Pricing strategy Moore (2002, p. 28) points out that there are diverse expectations between the visionaries and the pragmatists groups of customers in the market. Since price is an important integral in the completely marketing process of bridging the gap, the company also considered reasonable pricing for some of its products (Wheelen & Hunger, 2012, p. 188). While giving customers a value for their money, oreo chocolates ensures that it does not exploit the customers by overpricing their products. The fact that people understand the quality of the products is the main reason why the brand has received in the recent past increased sales in the U.K. market. Market size for the dairy milk oreo chocolate Since its launch, the product has received increased market growth and expansion. The company, focusing on the United Kingdom market with the impressive tastes of the dairy milk oreo chocolate strategically captured the entire market. However, this came as a strategy for the company that aimed at targeting the entire market using an extremely new product developed strategically for the market. With the success of the product in the few years since its launch, it is likely to experience increased growth rate. With all major retail stores in the country stocking the products, the company is likely to command even a bigger market share than what it currently commands. Despite operating in extremely competitive industry, the brand hopes to win against its competitors, commanding the largest share of the market due to the quality, value, and core competencies. Industry analysis Macro environmental trends Among the various factors affecting the success of milk chocolates with oreo include culture of the people, legal factors, political; factors, political factors, business environmental factors of the country and demographic factors. Culture According to Neelankavil (2007, p. 23), culture of the people is one of the most important factors to consider before introducing a new product in a new market. Experts argue that since United Kingdom is the most developed countries globally, it is important for any organization to understand that numerous people live in the country, with differences in their cultural backgrounds. This is because culture not only determines the kind of products and services to offer to the people, but also determines the advertising media and tools to employ among the people. Some of the cultures do not allow for processed foods. Subsequently, the company should consider these practices before launching the product. Further, some cultures do not allow the use of flavours in foodstuffs. This is a great drawback in the success of the highly flavoured dairy milk oreo chocolates. Legal factors Every country has different legal systems from each other. As constitutions govern different countries, the constitution establishes the laws governing businesses operating within its jurisdiction. As such, any entrepreneur seeking to establish operations at the international level ought to consider the laws governing the businesses in target countries. The most important law to put into consideration is taxation of the businesses in the country (McDonald & Burton, 2002, p. 120). United Kingdom, comprising of a number of states with different governments differ in their tax rules. As a result, different countries have different laws that govern their tax systems. Subsequently, the company faces problems when pricing their products meant for different companies. This creates discrepancies in their income statements, thus affecting its income statements. Labour laws also determine the success or failure of an organization at the international level, especially when the company focuses on manufacturing products for a wide market. This affects the businesses operating in these areas, as it increases operational costs of these businesses. The result is reduced revenues or closure of operations whenever such companies fail to comply with the labour laws of the country (Kandogan, 2006, p. 18). With the increased cost of labour in the country, the company has to seek for alternative ways of production such as increased adoption of technology. Subsequently, it increases its operational costs, culminating to reduced profitability levels. Business climate of the country The government of any country provides the necessary policies and framework for businesses operating in the country. The government, either directly or indirectly lays down the necessary infrastructure such as roads, railways, airports and security that attracts investors due to the ease of operations. An entrepreneur should consider these essential factors before setting up operations in any particular country. If the country has proper infrastructure, then it is a good investment destination (McDonald & Burton, 2002, p. 128). However, it is important to understand that the private sector has no ability to influence these decisions. As Cadbury has little control on the environment, it has to rely on the government to provide these amenities. Sometimes, with the delays of the highly bureaucratic government structures, there are negative effects on the success of the business. According to Prakashan (2007, p. 22), an analysis of the existing businesses in the country could also reveal the viability of the business climate in the country. Further, Prakashan (2007, p. 24) advises that this climate keep on fluctuating, which necessitates constant adjustment of the organizations’ operations. Technology The rate at which the current technological environment changes with is amazing. While organizations increasingly spend considerable amounts of their revenues on technology, more often than not, this technology becomes obsolete, thus increasing the costs of doing business. Further, policies keep on changing especially on the kind of technology that a business should use. Dairy milk oreo chocolate suffers from this problem, as it cannot substitute technology with labour. Conclusion Every organization, in order to have a competitive advantage over other firms in the industry need develop and implement a strategy. The strategy aims at helping the organization establish a niche in the market, thus edging itself against other businesses. With the increase in the level of competition, it is imperative for an organization to develop a strategy that will give it a competitive advantage over other businesses. The uniqueness of a strategy and its ability to satisfy the needs of the customers determines its ability to improve the performance of the organization. The ability of the company to edge itself as a high value band relative to other brands in the market is the main contributing factor to the success of the product in the market. Among the various elements determining the success of the business in the organization, include Market segmentation, targeting, positioning, and size of the market. Despite these successful factors, the macro-environment factors affect the success of the brand. Among these factors, include technology, legal factors, business environment of the country of operation and culture of the people. Works Cited Cant, M. C 2006, Marketing management. Cape Town, South Africa, Juta. De Loecker, J 2011, “Product differentiation, multiproduct firms, and estimating the impact of trade liberalization on productivity”, Econometrica, 79(5), 1407-1451. Kandogan, Y 2006 Does product differentiation explain the increase in exports of transition countries?. Eastern European Economics, 44(2), 6-22. McDonald, F., & Burton, F. (2002). International business. London [u.a.: Thomson Learning. Moore, G. A 2006, Crossing the chasm: Marketing and selling disruptive products to mainstream customers. New York: Collins Business Essentials. Neelankavil, J. P 2007, International business research. Armonk, N.Y: M.E. Sharpe. Prakashan, N 2007, International Business and New Trends. Nirali Prakashan. Mumbai Wheelen, T. L., & Hunger, J. D 2012, Concepts in strategic management and business policy: Toward global sustainability. Boston ; Munic [u.a.: Pearson Prentice Hall. Yuece, I 2012, Impact and Role of Market Research in New Product Launch Process. GRIN Verlag. Zikmund, W. G., & Babin, B. J 2013, Essentials of marketing research. Australia, South-Western Cengage Learning. Read More