Marketing Environment and Strategy Analysis Report for Haighs Chocolate - Case Study Example

THE MARKETING ENVIRONMENT AND STRATEGY OF HAIGH’S CHOCOLATES Name Course Tutor Date Executive summary This marketing environment and strategy analysis report is based on Haigh’s Chocolate that is based in Australia. The report is divided into several sections each touching on its own designated points concerning the outlined topic. The first section introduces the report giving an overview of the company and the basis of the report. The next section looks at the background of marketing of Haigh’s Chocolate in different aspects exploring each in a multistep approach. This section is mainly based on the SWOT analysis provided in the appendix. The next section then evaluates the marketing mix of the company. The next section then looks at the competitors comparing their marketing mix and that of Haigh’s Chocolate as well as the marketing strategy in place. The next sections then outline the recommendations worth taking into consideration by the management of the company. The next section then concludes the report by highlighting some key issues. There is then the list of references that were conducted in writing the report and then the Appendix section that gives the SWOT analysis and brand positioning chart of the company. Table of Contents Table of Contents 3 Marketing Background of the Company 5 Resources and Capabilities 5 Products and Customers segment 5 Brand Assets 6 Sustainable Practices 6 Marketing Mix 7 Haigh’s Chocolate Products 8 Haigh’s Chocolate Pricing 8 Haigh’s Chocolate Promotion strategy 9 Haigh’s Chocolate Distribution 10 Competitor Analysis 10 Recommendations 11 Conclusion 13 Bibliography 14 Appendix 15 Appendix 1: SWOT ANALYSIS of Haigh’s Chocolate 15 Appendix 2: Brand Positioning of Haigh’s Chocolate from selected products 16 Introduction Haigh’s Chocolate is an Australian brand that was established in the year 1915 by Alfred E Haigh. The Australian brand is known for its premium gifts, chocolate, and a range of stupendous retail experiences across Australia. The chocolates of the company are retailed through the company’s own network (Haigh's Chocolate, 2015). The company is proud to be one of the most successful families owned business that is currently run by fourth generations: Alister, Simon and Haighs as joint managing directors since 1990s and John Haigh as the Chairman of the board (Haigh's Chocolate, 2015). The company provides employment to over 500 people throughout the factory, its administration as well as the fourteen retail stores located in Sidney, Melbourne, and Adelaide. The company also rides itself as a bean to bar specialist and has a unique cooking process for the making of chocolates. The ingredients are sourced from all over the world (Australian Institute of Management, 2014). Most of the chocolates from the company are handmade and finished (Haigh's chocolate, 2015). The company has a committed team of specialized confectioners that come up with new recipes as well as improve the quality of the old favorites so as to ensure that the customers continue to enjoy (Lee et al., 2010). The company has over 250 varieties of products from gift boxes that have truffles to chocolate frogs. The vision of the company which is “Delivering a world class chocolate experience every time” drives the company to new heights (Haigh's Chocolate, 2015). The company is also driven by values such as collaboration, clarity, respect, responsibility, recognition and passion and pride. The aim of this report is to analyze the marketing mix that is used by the company, comparing it with that of its competitors and thereby giving recommendations where necessary. Marketing Background of the Company To completely envisage the marketing background of Haigh’s Chocolates there should be an effective internal as well as external audit. A close consideration is given to the internal strengths and weaknesses, the external threats and opportunities available for the company, direct and indirect competitors and the customers. As aforementioned, the company is founded on a strong vision that is to deliver a world class chocolate experience every time (Haigh's Chocolate, 2015). This is also coupled with the values pointed out in the introduction. Resources and Capabilities The company currently offers employment to over 500 individuals in various areas. The company has a well experienced marketing department that has an online presence and aggressive marketing strategy (Haigh's Chocolate, 2015). The location of the company in the busy streets makes it easily accessible to the customers. The customer service provided in by Haigh’s Chocolates is also terrific. Additionally, the company has invested in technology, quality equipments, and techniques as well as competent human resource, so as to offer customers value for their money (Haigh's Chocolate, 2015). Products and Customers segment The company currently offers over 250 product lines and meets various customer needs such as chocolate and gifts (Haigh's Chocolate, 2015). The price of the products, range from one dollar to about less than $100 (Haigh's Chocolate, 2015). Worth to note is that the company has been doing the delivery of its products since 1915, improving on quality now and then. The company also offers corporate sales for products such as gift boxes, token gifts, and hampers boxes among others (Haigh's Chocolate, 2015). The company targets the customers of various ages. The young people and couples are the most targeted for consumption and gifting. It also targets the corporate for gifts and product assortments. As demographics would suggest both the old and young would be potential customers being that the products are of high quality. The old tourists visiting Australia have the chance of tasting the products when undertaking a company tour (Haigh's chocolate, 2015). Brand Assets The company has well established brand awareness, especially in Adelaide and most recently in Sydney where it established a branch in 2005 (Haigh's Chocolate, 2015). In Melbourne there is moderate to high brand awareness while in Sydney the brand awareness is still toppling between low to moderate. Additionally, the brand awareness in the rest of Australia is not very well distributed (Haigh's Chocolate, 2015). The company is basically known for its premium quality chocolate that is made from cocoa sourced from the best suppliers across the globe. The company has received various awards and it also sells its products through its own network thus security. The company also distributes its products through the Adelaide zoo an airport (Austin, 2012). There is a strong relationship between the departments. In fact, teamwork forms the core value of the employees regardless of rank. The company also has a well distributed online presence. Sustainable Practices The community is one of the most appreciated units at Haigh’s Chocolate. The company has been a major contributor to a plethora of charitable organizations, community projects and environmental causes (Douglas, Christopher & Michael, 2012). The company supports sustainable farming wherever they are sourcing for raw materials (Haigh's Chocolate, 2015). The company recognizes that Australia does not have a viable cocoa growing sector. For that reason, it imports raw and high quality cocoa beans at premium prices from cocoa growers like South America, the Pacific and Africa, blending them locally and producing high quality products (Haigh's Chocolate, 2015). Still at the same time the company sources the locally available ingredients such as sugar, nuts, and dried fruits from the Australian suppliers. The company is also UTZ certified thus able to help farmers understand better farming methods, improved working environments, and takes care of children (Haigh's Chocolate, 2015). This increases productivity in the market. The company also forms partnerships with other global governments and non-governmental organizations so as to broaden its sustainability globally. It is also a member of the World Cocoa Foundation that has a variety of sustainable practices. The company is also involved in a variety of children’s charity programs through offering financial support from parts of its proceeds (Gary, et al., 2014). Through the initiative the company has been able to enrich the lives of sick, disadvantages and destitute children. It also opens up applications for charitable organization for funding. The company is committed to protect the environment (Haigh's Chocolate, 2015). Through its Greenpeace it ensures that no genetically modified products are sourced. Its packaging materials are also recyclable. The company also appreciates the contribution of the stakeholders on how to improve he work practices for the good of the environment (Haigh's Chocolate, 2015). There are myriad of initiatives by the company that are environment based that are identifiable from its website. Marketing Mix Marketing mix refers to a set of actions or techniques that a company uses in order to promote its brand or products in the market (Douglas & Hubert, 2010). A typical marketing mix consists of four tenets: price, product, promotion, and place (Tobias, 2012). These tenets are referred in some literature as the 4 Ps (Richter, 2012). There are however other more. For the purpose of this report only three major tenets will be examined; product, price, and distribution. The latter is more of place. Price refers to a value that is attached to a product, place; the point of distribution, and product; the items being sold in the market (Pride & Ferrell, 2008). Haigh’s Chocolate Products The company offers a variety of products. There are over 250 product lines that the company offers to the market (Haigh's Chocolate, 2015). The products are premium quality and include a variety of chocolates such as milk, dark and white chocolates. Others include boxed, loose chocolates, gourmet, novelty chocolates, bars, and confectionery (Haigh's Chocolate, 2015). Haigh’s Chocolate recognizes that there are special occasions and has gift collections for a variety of occasions such as Easter specials and personalized products. The company also offers corporate packages such as gift collection upon request (Haigh's chocolate, 2015). Haigh’s Chocolate Pricing The prices at Haigh’s Chocolates are flexible and affordable. Most of the products have prices ranging from $1 for a single bar of chocolate or loose chocolates to over $100 for gift boxes. This is in essence a strategy that ensures that all the segments of the market are well attended to through affordable pricing (Haigh's Chocolate, 2015). All budgets are actually taken care for through different pricing of the products. The assorted Truffles for example sell at $71.50 for a 500g package while $47.50 for a 300g package. Mild and Dark Assortment on the other hand sells at $69.50 for 500g and $104.00 for 750g (Haigh's Chocolate, 2015).This is good enough evidence that the prices are based on the weight as well as the product in question (Haigh's Chocolate, 2015). Haigh’s Chocolate Promotion strategy Haigh’s Chocolates have been in the business for a long period of time, transitioning in various methods of promotion. The company appreciates the role of technology as the key promotion channel when targeting a wide consumer base (Australian Institute of Management, 2014). For that matter, part of the promotional strategy of the Haigh’s Chocolates is the use of e-commerce. The company has invested in a website that has all the products it offers. The customers are able to view the available products at a glance alongside with the pricing (Austin, 2012). The customers are able to make their own accounts and send orders through the website. This shows that the company has an online store where the potential customers are able to access the products (Austin, 2012). The website also outlines the variety of gifts that the company offers to the corporate as well as for special occasions. Haigh’s is also not left behind in the era of social media marketing. The company has a well and up to date social media pages (Haigh's Chocolate, 2015). The pages are meant to emancipate the masses about the products offered by the company as well as give facts that can lure more customers. Haigh’s Chocolate has a Facebook page that has 33129 likes (Haigh's Chocolate, 2015). Well, this is not a good number considering the demographics of Australia and the world at large (Haigh's Chocolate, 2015). The company also has a twitter page where it posts relevant messages to its followers. In the twitter section the company has only 848 tweets and 1868 followers. On the other hand, the company has also established its You-tube link that directs one to the site where there is a video of the products of the company (Haigh's Chocolate, 2015). Despite the efforts on You-tube, it only has 1411 views that is considering the last four months. Statistically speaking, the traffic to the social media platform pages of the company is not well grounded per se, since there are thousands of people online (Zarella, 2010). Haigh’s Chocolate also appreciates the role of email marketing. This involves sending emails to those who subscribe (Zarella, 2010). For that matter, on the website there is a slot where one can enter their email so that they are emailed. This mainly involves sending the same email that is promotional to those who subscribe to it (Zarella, 2010). Haigh’s Chocolate Distribution The company has 14 retail stores. 6 are located in Adelaide including the historically known Beehive Corner, 6 in Melbourne and 2 in Sydney. The online presence of the company as well as international representation is not well. The company also has Parkside at the center of Adelaide where there is a vision center. Here the tourists are given a chance to taste and purchase the products. The stores are consistent across Australia in the mentioned cities where there is the concentration of the affluent and the high-economic suburbs (Austin, 2012). In these areas there are people with disposable income who can easily access the store for purchases. The distribution network is secure being that it is directly controlled by the company. The stores are also located in the heritage listed, grand buildings, close to hotels and financial districts to make the access possible. Competitor Analysis The confectionary industry in Australia is well established and matured (Belesina, 2012). Therefore, as you would expect in any other market, there are competitors who play alongside Haigh’s Chocolate, targeting the same markets and using more or less the same promotional methods. The brands that compete directly with Haigh’s Chocolate include Cadbury, Nestle, Mars, Lindt, Mayfield Chocolates and Ferrero (Euromonitor, 2014; Belesina, 2012). These brands are equally well distributed across Australia through many outlets. The indirect competitors include the products that use the same ingredients but are not within the chocolate category. This includes wine, flowers, gifts, and gourmet food among others that shift the attention of the customers (Euromonitor, 2014). Nestle has effective pricing for its products as is Haigh’s Chocolates and so are other competitors (Belesina, 2012). According to Euromonitor (2014) the chocolate industry in Australia is growing at the rate of 4% annually. This is mainly driven by the boxed assortments and twist wrapped miniatures. Cadbury a close competitor of Haigh’s ranked top in the industry has the art of using boxed assortments. Cadbury has a tagline Cadbury Favorite that makes it exclusive to its customers. Cadbury’s twist wrapped miniatures grow by 13% (IBIS World, 2014). Mondelez Australia is the leading chocolate company in Australia through its Cadbury brand. The company has a value share of 43% as per 2013 (Belesina, 2012). Cadbury is given a boost by the Joy ville campaign and a number of marketing campaigns in its social network platform such as Facebook, twitter, Instagram and you tube (IBIS World, 2014). Nestle Australia limited also poses an indirect competition being that it deals with sugar confections (IBIS World, 2014). The company is known for its social media presence as well as the marketing campaigns that promote its Allen’s brand (Euromonitor, 2014). Recommendations The market value share of Haigh’s is not good comparing the consumers in the market and the mature confectionery market. As evident in the Appendix 1, there are a variety of strengths, weaknesses, opportunities, and threats that requires the attention of the company. The first thing the company’s management should consider is to make its presence in the whole Australia and the world in particular viable. The company can do this through opening up other outlets all over Australia and making its presence in the world known. For example, instead of spending more in the importation of all raw materials the company can consider installing overseas manufacturing plants in areas where there are raw materials (Sharp, 2010). The other thing the company should consider is to make its online market vibrant. This would call for a vibrant and aggressive marketing campaign that will drive more customers to like its products. The other point the firm should consider is to make the consumers understand that it has researched on the health impacts and the methods it’s using to ensure their safety (Sharp, 2010). For instance, the company should have a research and development wing that directly interacts with the customers so that their insights are included in decision making for the products development. Haighs should also consider a database marketing and Search Engine Optimization so that the traffic of the customers, who seek information about chocolate products, can be increased (Australian Institute of Management, 2014). Haigh’s chocolate should also conduct an assessment of the market. This can be done through a marketing research that aims at identifying how the firm can enter and conquers further the existing markets (Euromonitor, 2014). This will also make it fill the gap in the market left by Swiss Glory and Darrell Lea as well as raise the brand awareness levels in Sydney (Australian Institute of Management, 2014). To reduce the labor costs, the cost of imports can be reduced through overseas production and just little production in Australia. The company should also invest in latest storage technologies so as to reduce the perish ability of some of the products (Sharp, 2010). Product diversification should be the core strategy for the company so as to win the competition being posed by companies such as Mars and Mayfield that produce the same products (Australian Institute of Management, 2014). Conclusion The confectionary industry in Australia is very mature and has a lot of competition. Only well planned market strategies are able to make companies in the field fair on well. Haigh’s Chocolate has competitors such as Cadbury, Nestle, Mars, Lindt, Mayfield Chocolates and Ferrero as well as other indirect competitors. The current market value share of the company is not good being that it has not invested well in marketing its range of products. The company only has 14 stores that are not well distributed across Australia. The company has social media campaigns that are geared towards raising awareness of the brand. However, they are not doing well as they should. If Haigh’s Chocolate considers the above recommendations it will be able to perform fairly well and counter its competitors in the market. Haigh’s Chocolate is also committed to ensuring that there are sustainable practices in all its transaction. This combined with the values of the company and the strong vision that drives the company, has ensured that the value for the customers and the society is generally upheld. Bibliography Austin, N. (2012, November 20). Haigh's exclusive store strategy works. Retrieved from http://www.adelaidenow.com.au/business/sa-business-journal/haighs-exclusive-store-strategy-works/story-e6fredel-1226519819739 Australian Institute of Management. (2014, July 11). Management Today | Niche working a treat. Retrieved from http://www.mtmag.com.au/haighs-chocolate-alister-haigh/ Douglas, B. & Hubert, G. (2010). Market Response and marketing mix models: Trends and research opportunities. Netherlands: Now Publishers Inc,. Douglas, M., Christopher, F. & Michael, P. (2012). Microeconomics. Sydney: Pearson Higher Education AU. Belesina, A. (2012, May 18). Chocolate and confectionary manufacturing in Australia: updated market research report | FEN. Retrieved from http://www.myfen.com.au/news/updated-market-research-report-on-chocolate-and-co Euromonitor. (2014, February). Confectionery in Australia. Retrieved from http://www.euromonitor.com/confectionery-in-australia/report Gary, A., Stewart, A., Sara, D. & Philip, K. (2014). Principles of marketing. Melbourne: Pearson Australia. Haigh's Chocolate. (2015). Haigh's Today - Haigh's Chocolates. Retrieved from http://www.haighschocolates.com.au/about-us/haighs-today/ IBIS World. (2014). Chocolate and Confectionery Manufacturing in Australia Market Research | IBISWorld. Retrieved from http://www.ibisworld.com.au/industry/default.aspx?indid=110 Lee, M., Marc, L., Ron., C & Lee, A. 2010. Frommer’S Australia. London: John Wiley & Sons. Pride, W. M., & Ferrell, O. C. (2008). Marketing. Boston: Houghton Mifflin Co. Richter, T. (2012). International marketing mix management: Theoretical framework, contingency factors and empirical findings from world-markets. Berlin: Logos-Verl. Sharp, B. (2010). How brands grow: What marketers don't know. Oxford: Oxford University Press. Tobias, R. (2012). International marketing mix management: Theoretical Framework, contingency factors and empirical findings from world-markets. Logos Verlag Berlin GmbH. Zarrella, D. (2010). The Social Media Marketing Book. Sebastopol: O'Reilly Media, Inc. Appendix Appendix 1: SWOT ANALYSIS of Haigh’s Chocolate Strengths Strong Brand legacy since establishment in 1915. Presence in South Australia, South Wales and Victoria Over 500 employees who are committed 14 well distributed retail stores Popular tours to factory Strong brand equity High quality premium products Quality equipments and technology Pricing catering for all budgets Experienced marketing department High performance in the market Strong business relationships and sustainable practices UTZ certification Weaknesses Poor representation in the Social platforms Adelaide factory manufactures all the lines for the stores Low brand awareness in Sydney Heavy reliance on the overseas suppliers for premium quality raw materials Opportunities Home and workplace deliveries Market expansion to the rest of Australia Online store presence Storage technology advancement Closure of Darrell Lea and Swiss Glory Overseas manufacturing Threats Strong Competition from other chocolate companies such as Mayfield chocolates and Mars Response to the rising health awareness of the Consumers and the society Health regulations Labor costs High import duties and fluctuations of the Dollar thus inflation Appendix 2: Brand Positioning of Haigh’s Chocolate from selected products Read More