Analysis of the Market that Haighs Chocolate Operates - Case Study Example

Code+ course name Instructor’s Name University Name City, State Executive summary This report provides a thorough analysis of the market that Haigh’s Chocolate operates. The report will describe in details the marketing background of the company, the type of company Haigh’s Chocolate is, the business that the company is involved in, sustainable practices that the company embraces. The report will also analyse the main products of the company and product portfolio. Marketing strategies used by Haigh’s chocolates will be described at length including the pricing strategy, promotion strategy and the distribution strategy. The report compares the marketing mix used by Haigh’s Chocolates to its competitors who include Nestle and Cadbury. Finally, the report will try and make recommendations on how Haigh’s Chocolate can improve on their marketing strategies in order to be more competitive and be among the market leader in the chocolate industry in Australia. Table of Contents This report provides a thorough analysis of the market that Haigh’s Chocolate operates. The report will describe in details the marketing background of the company, the type of company Haigh’s Chocolate is, the business that the company is involved in, sustainable practices that the company embraces. The report will also analyse the main products of the company and product portfolio. Marketing strategies used by Haigh’s chocolates will be described at length including the pricing strategy, promotion strategy and the distribution strategy. The report compares the marketing mix used by Haigh’s Chocolates to its competitors who include Nestle and Cadbury. Finally, the report will try and make recommendations on how Haigh’s Chocolate can improve on their marketing strategies in order to be more competitive and be among the market leader in the chocolate industry in Australia. 2 Table of Contents 3 Haigh’s Chocolate Company vision and values include: 5 Haigh’s Chocolate Business 5 Sustainable practices by Haigh’s Chocolates 6 Products and Products Portfolios 7 Services 8 Suppliers 8 Customers 8 Marketing strategies used by Haigh’s Chocolates 9 Pricing 9 Promotion 10 Distribution 10 Comparison of Haigh’s Chocolates marketing mix to its competitors 11 The marketing mix 12 Product 12 Place 12 Promotion 13 Price 14 Recommendation for improvement of marketing mix for products to become more competitive 14 Conclusion 15 References 16 Appendix 18 SWOT Analysis 18 Positioning chart 19 Introduction Haigh’s Chocolate is an Australian brand that is associated with chocolates and confectioneries. The company was established on 1st May 1915 by Alfred E Haigh at 34 King William Street, Adelaide. It is private owned company and the oldest family-owned chocolate maker in Australia (Kerry, 1998). The company headquarters are at Adelaide Australia, and currently the company has 14 retail outlets located across three major Australia cities of Adelaide, Sydney and Melbourne. The company has managed to employ approximately 500 people directly in the factory, administration and the retail stores (Haigh’s Chocolates 2015). Haigh’s Chocolate Company vision and values include: The company vision is delivering a world class chocolate experience every time and the values of the company are caring and considerate of the employees, customer, suppliers, shareholders, the community and the environment through; collaboration, clarity, respect, responsibility, recognition and passion and pride (Kerry, 1998). Haigh’s Chocolate Business Haigh’s Chocolate Company is in the business of chocolate making. The Company is very much committed to the art of premium chocolate making from special cocoa beans that they source from plantations around the world (Haigh’s Chocolates 2015).The company uses unique techniques to make its chocolate that stands out in the market. The team in the factory is multitalented with artisan skills as well as the combination of latest modern manufacturing techniques, latest equipments, and excellent training enable them create chocolates that are so delicious and wow (Kerry, 1998). Sustainable practices by Haigh’s Chocolates Haigh’s Chocolate is very much committed to sustainable practices; these are practices that involve environmentally-friendly practices that the company has initiated. The company becomes a more sustainable organization by initiating these practices (Ferrell, & Hartline, 2012). Sustainable farming is a key responsibility for Haigh’s Chocolate Company whether sourcing the cocoa locally or from other parts of the world. The five things that Haigh’s Chocolate Company does to contribute to sustainability include; sourcing some products like sugar and milk powder locally, encouraging UTZ certified programs, paying a premium on the market price to farmers, association with the Australian industry group confectionary sector and being a member of world cocoa foundation (Worldcocoa 2015). The cocoa growing industry in Australia is not viable and the company is forced to import raw high quality cocoa beans from other cocoa growing regions that include Africa, the Pacific and South America. The company then roasts the cocoa and blends them locally in order to guarantee high quality chocolate production. To support Australia producers the company where possible sources other ingredients that include milk powder, sugar, nuts, and dried fruits locally. Haigh’s Chocolate is UTZ Certified, UTZ stands for sustainable farming and better opportunities for farmers, their families and our planet. The UTZ Certified program is very important because farmers can learn new farming techniques, the working conditions for the farmers are improved and the farmers can take care of their families and the environment. Farmers who learn new farming methods and grow betters crops will get better opportunities and high earnings and the same time taking care of the environment. This in the long run will contribute to the farmers being financially sustainable and stable and able to provide for the family (Worldcocoa 2015). Haigh’s Chocolate Company encourages best farming practices by farmers by paying them a premium on the market price. Haigh’s Chocolate Company chose to be associated with the Australian industry group (Ai Group) confectionary sector. This has encouraged the company to continue creating employment to hundred of Australians and thousands of UTZ certified farmers across the word. Haigh’s chocolate being a direct member of the World cocoa foundation is very important, the foundation works in all cocoa growing regions around the world helping farming communities in one way or the other. The foundation is helping to achieve cocoa sustainability, educate farmers, conducting scientific research and field programs and supporting cocoa communities (Worldcocoa 2015). Products and Products Portfolios Haigh’s Chocolate Company is in the business of chocolate making, the main product is chocolate for both individuals and corporate. The major types of chocolates include; dark chocolates, milk chocolates, white chocolates, truffles and assortments. Chocolates are also manufactured with the dietary need in mind, these includes chocolates that are free of eggs, chocolates that are free of gluten and chocolates that are free of both eggs and gluten. Chocolates are inform of boxed, bars, confectionary, novelty, block and gift collections. Corporate sales include when shopping for chocolates as gifts for organizations, for corporate clients, conference, guest speakers and even staffs. These can be small token gifts and presentation boxes or hamper boxes are the perfect gifts. Services All deliveries for chocolates by Haigh’s Chocolates are done using the Express post services. Deliveries are done to addresses within Australia and not to lockers owned by the Australian Post parcel in order not to expose the chocolates to high temperatures that may affect the quality of the chocolates. Chocolates can also be shipped to overseas countries and if ordered via the online store a flat rate charge of $ 15 AUD for each delivery applies. Suppliers The suppliers of Haigh’s Chocolate include both local suppliers and foreigners. Local suppliers are involved in supplying ingredients that are available locally and includes milk powder, nuts, sugar, and dried fruits. Foreign suppliers are mainly from cocoa growing regions in the world and the mainly supply high quality raw cocoa beans (Stringer, 2015). Customers Haigh’s Chocolates customers includes locals, individuals and corporate as well as foreigners. Individual local customers are those that visit the company’s 14 retail stores in Adeline, Sydney and Melbourne and purchase directly. Corporate customers shop for the chocolates as gifts for organizations, for corporate clients, conference, guest speakers and even staffs in small token gifts and presentation boxes or hamper boxes. The other customers are the one who imports the chocolates from overseas by purchasing them via online shops (Birchall, 2013). Marketing strategies used by Haigh’s Chocolates A strategy can be referred to as a long term plan that is used to achieve a certain objective. A marketing strategy in this case is a long term plan that is designed to achieve a certain marketing objective (Green, Whitten, & Inman, 2012). Haigh’s Chocolates uses pricing, promotion and distribution strategy to achieve its marketing objectives. Pricing Pricing strategy is used by Haigh’s Chocolates amicably. The company products have the right prices making the neither cheap nor expensive (Cateora, Gilly, & Graham, 2013). The prices are not too high to causes customers to flock to cheaper competitors nor too low to make customers think or assume that the products are of poor or low quality. The company values customer feedback on the price of a certain product because it has invested a lot of time and resources to develop it and it makes sure the customer gets the value of their money after consuming the product. The company uses competitive pricing whereby it assess the product price compared to the rest in the market and also the value that the target market put on the unique features of the products. The company also uses premium pricing where it sets the price of its products slightly below the prices of other competitors in order to get a competitive edge (Nagle, & Holden, 2013). Promotion Haigh’s Chocolates uses promotion strategy to communicate the benefits of its products to the target markets. The company uses promotional mix strategies that consist of advertising using the mass media like newspapers, radios and television. The company also uses internet marketing whereby it sells its products online using techniques such as social media (twitter handle and facebook pages), videos and banner advertisements. The company also embraces public relations as a promotional strategy whereby it creates a positive relationship with both the public and the media. This has assisted the company in obtaining favourable publicity within the public and able to handle negative attention. The company also adopts sales promotion as a promotion strategy; it gives special offers to the clients in order to obtain high sales in the short term (Shimp, & Andrews, 2013). Distribution Distribution refers to a strategy whereby the management of a company transfers its products through various distribution channels (Strategy, 2015). It is a very important activity that Haigh’s Chocolates employs to reach the target market. The distribution strategy for Haigh’s Chocolates is successful because of location of the retail outlets, the location of the target market, warehousing of the product and transportation of the product. The 14 retail outlets that Haigh’s Chocolates operates are strategically located and retail directly to customers and also very convenient to customers to visit. Haigh’s Chocolates main target group is the young people who buy chocolates for consumption and couples who buy chocolates as gifts, the target group are able to access the retail outlets to purchase their favourite brands. Haigh’s Chocolates are kept in a very safe and clean warehouse and transported in a professional manner using equipments that are health conscious and environmentally friendly. There are no multiple channels of distributions used by Haigh’s Chocolates. The chocolates are manufactured, send to the retail stores and then bought by the consumers. This shortens the time the product gets to the consumer and the products will be very fresh (Green, Whitten, & Inman, 2012). Comparison of Haigh’s Chocolates marketing mix to its competitors The major competitors to Haigh’s Chocolate for the chocolate market are Cadbury, Nestle and Mayfield Chocolates. Competition is very healthy for any industry to grow; it refers to the rivalry among companies that are selling similar products with an objective of maximizing profits, increasing revenue and controlling the bigger market share. There are two types of competition that Constraints Haigh’s Chocolate faces from its competitors; these are the direct and indirect competition. A direct competitor is another company that produces the same product targeting the same market with an objective market share growth and profit making, for instance Mayfield Chocolates. Indirect competitor is another company which offers the same product but with different objectives. They seek to grow revenue using different strategies for example, Cadbury and Nestle (Sabnis, & Grewal, 2012). Marketing mix refer to putting the right product in the right place, at the right price at the right time using the most suitable promotion (Dang, 2014). To bring a product to the market Haigh’s Chocolates have to make different choices using the 4Ps of marketing. The 4Ps are: Products Place Price Promotion The marketing mix Product A product should have the following characteristics, the brand name should be appealing, should be packaged in an attractive way, should be safe to use and should be of the best quality. All these characteristics will enable the consumer make the best decision. Cadbury and Nestle have managed to be the main market leader of chocolates in the Australian market because of the brand. In many years they have managed to protect their brands therefore continuing to dominate the market (Sabnis, & Grewal, 2012). Place It is all about getting the product to the customer, the distribution channels should be excellent, good transportation, the right inventory management, ordering process and safe and clean warehouses. The above strategies have well been perfected by Cadbury and Nestle making them control the biggest share of chocolate market in Australia. Promotion Promotion is used to represent various aspects of marketing communication; information about a certain product should reach the target market as soon as possible in order to get a positive response. Promotion decisions include sales promotion, advertisements, publicity, relationship management and promotional strategies. Price Products should have the right prices that consumers can get the value of the money used to make the purchases. Recommendation for improvement of marketing mix for products to become more competitive Haigh’s Chocolates can be more competitive if the company adopts a more unique promotional strategy that includes; a customer referral incentive program whereby current customers are encouraged to refer new customers and by doing so they get cash rewards and discounts. This promotional strategy is crucial at increasing sales and leveraging customers. Promotional strategy can also be done by Haigh’s Chocolates promoting its chocolates and at the same time supporting a cause. This can be done by donating a small fraction of the company’s profit to cause the company has committed to give a hand. The cause can be the one that supports environmental management. Haigh’s Chocolates can also be more competitive if it comes up with a customer appreciation event. An event where customers are given free refreshments and door prizes will attract many customers into the 14 retail stores. Haigh’s Chocolates should adopt sustainable packaging guidelines for its brands. Procurement packages should be designed in such a way that they fulfil the sustainable packaging guidelines according to the Australian packaging covenant. Haigh’s Chocolates should also adopt relationship marketing where the company will focus on retaining customers and satisfying them and by so the company will enhance its relationship with existing customers to improve loyalty. Haigh’s Chocolates should adopt a pricing strategy whereby it should set the price of its products slightly lower than those of the competitors in order to attract more customers and this will lead to an increase in sales. Conclusion Haigh’s Chocolates is a brand that has a lot of potential in the Australian market. This can be done if the management of the company beats the tough competition by adopting strategies that are workable. Promotion strategy if best adopted by the company can really work, customers are able to get the message concerning the product and this will create an appetite for the products. Haigh’s Chocolates products can become more competitive in the Australian chocolate market if the company gets the marketing mix right. The company should make sure that they perfect the art of balancing the 4Ps of marketing. The product should be packed in an attractive package, the place where the products are sold should be strategic to allow access, promotion should be done in a manner that will reach all the target market and the price should be competitive enough to attract as many customers as possible. References Birchall, A. (2013). Niche working a treat. Management Today, 2013(July 2013), 30. Cateora, P. R., Gilly, M. C., & Graham, J. L. (2013). International marketing. McGraw-Hill Irwin. Dang, T. (2014). The success of applying marketing mix 4Ps in Vietnamese dairy industry: Vinamilk–a typical case. Ferrell, O. C., & Hartline, M. (2012). Marketing Strategy, Text and Cases. Cengage Learning. Green, K. W., Whitten, D., & Inman, R. A. (2012). Aligning marketing strategies throughout the supply chain to enhance performance. Industrial Marketing Management, 41(6), 1008-1018. Haigh’s Chocolates. [online] Available at: .[Accessed on 07 April, 2015]. Kerry, C. (1998). The Haigh's Book of Chocolate. Wakefield Press. Limited. Nagle, T. T., & Holden, R. K. (2013). Strategy and tactics of pricing. Pearson Education Sabnis, G., & Grewal, R. (2012). 5 Competition and its implications for marketing strategy. Handbook of Marketing Strategy, 58-77. Shimp, T., & Andrews, J. C. (2013). Advertising promotion and other aspects of integrated marketing communications. Cengage Learning. Strategy, G. M. S. T. M. (2015). 21 International Marketing. Strategic International Management: Text and Cases, 481. Stringer, R. (2015). Vanuatu: Bean to bar: Vanuatu chocolate. Worldcocoa. [online] Available at . [Accessed on 07 April, 2015] Appendix SWOT Analysis SWOT Analysis refers to the strengths and weaknesses of a company and is usually internal. Opportunities and threats that may face the company and they are external. Positioning chart A positioning chart is a graphical representation that is used to show where a product fits. Read More