Category: Chocolate

Synopsis

Rocky Mountain Chocolate factory is a public company, dating its incorporation back in 1982. The Company is a leading chain of stores dealing with confectioneries. It is proud to own more than three hundred retail stores in the U.S. It has centered its operation in the Sun Belt and the West coast, In Guam, in Canada, and the United Arab Emirates. The Company’s retail stores are appropriately located to attract tourist as it is within their areas of frequent visits not to mention other times at the outlet malls of factories where they visit regularly (Wheelen & Hunger, 2010, p.22-1).

Rocky mountain Chocolate Factory resources

Rocky Mountain Chocolate factory has a number of resources that made its growth evident over time. One is that the company was able to purchase its own fleet of refrigerators semis

After the company failure to find a shipper, it opted to build up its own fleet with in-built refrigerated semis, which have delivered beyond their expectations. The semis have increased its capacity to produce more confectioneries in both quantity and variety (Wheelen & Hunger, 2010, p.22-7).

Another key resource is the experience of a good number of confections over time. This has increased the company’s success. It has propelled the candities production in both quantities and varieties of more than 300 types of candies, although some stores are still using the traditional techniques (Wheelen & Hunger, 2010, p.22-8).

This experience has increased the supply of confectioneries directly from the stores. According to Wheelen & Hunger, chapter 8, this is due to increased confidence of the consumers over time, brought forth by provision of quality items for over twenty years.

The other resource is their expertise, in terms of trained employees and their passion for creativity and service. This expertise and commitment from employees and managers has made the company to; franchise gourmet chocolates other than just confectionery products. Currently, the company launched a new yogurt self-service concept through its subsidiary, Aspen Leaf Yogurt, Inc (Wheelen & Hunger, 2010, p.22-7, 22-8).

Finally, the issue of location is a vital resource to this company. This arises because its retail shops location is in tourist highly visited areas, and certainly, this increases sales to a larger extend. The new frozen concept is renowned considering its distribution to all the retail outlets through its subsidiary, Aspen Leaf Yogurt, Inc (Wheelen & Hunger, 2010, p.22-6).

Rocky mountain Chocolate Factory capabilities

The enormous resources that have been build up overtime; there is commitment and creativity among the staff. A number of competencies are explicit. As indicated in Chapter 7, One of them being its reputation that is of high quality. This has brought forth by the experience of the companies’ consumers over time as well as the experience of the company in handling its consumers. The company having more than 29 years of franchising is no mean achievement.

Their propriety training, as well as operating methods, is a significant capability that has grown with it over time. This came in after some realizations of losses in particular years-1985/86-when losses tripled to $146,706, when the company at that time had 55stores in 13 states, but the company recovered afterwards. The challenges of making the losses, created room for much more effective and training methods to increase stability of the company.

Lastly, of significant capability of Rocky Mountain chocolate factory is the company’s extensive relationships with developers and real estate companies, as well as their own subsidiary, Aspen Leaf Yogurt. This has played more roles than said. It has given them a competitive advantage over their competitors.

To a larger extend, their subsidiary [Aspen Leaf Yogurt, Inc.] has played a crucial role in marketing and distribution of their product to the retail stores.

In addition, their networking with real estate companies has enabled them set up retail stores in potential areas alongside building larger stores, for instance in 2002, February, the company introduced a 250-square foot kiosk concept for the areas in which 1000 square foot was impossible. This idea came because of close relations and consultation with real estate experts. This was a significant boost to shine over its competitors (Wheelen & Hunger, 2010, p.22-11).

Core competencies

Rocky Mountain Chocolate Factory does is on lead in areas such as production of diverse product line, rather than concentrate into one product line. This has been in an increasing scale over time, due to experienced staff, changing demands, tastes and fashions of consumers over the time.

The company has welcomed innovation. For instance, in 2000, there was an expansion in the product line to sugar-free candies, which accounted for 40% of the sales of that year. Other products from the stores accounted for another 40%, with the remainder from other quarters.

Maximizing on the retail concept unlike just concentrating on the main stores has been a core competency of the company. This concept has triggered modernization and upgrading to catch up with the times, as well as to increase a competitive niche with other competitors. This increased distribution from home consumption of their products.

A core competency that puts the company above the competitors is the decision of the companies to tailor the store designs to be an attraction for tourists. As tourists are attracted to these stores, they get to increase sales through consumption of the products.

These stores grew to be of tourist attractions on their own, with a good display of the making of confectionery offered to them. In addition to tourist attractions, were trademarks of fresh made fudge and apples mounted on a 500-pound slab of marble (Wheelen & Hunger, 2010, p.22-6).

Finding of Fact

The Rocky Mountain Chocolate factory had its foundation in 1981, by the family of frank Crail, who chose to begin it with the desire to grow. He began when he did not have much capital funds to run its operation. However, through struggles, earning profits, which could not make much because of subsequent losses suffered.

It was the first franchised store opened in 1986, and then the company went public after which in 1997 it restructured itself to focus on franchising operations (Wheelen & Hunger, 2010, p.22-1). The huge costs at this time made them experience some losses. However, they recovered and subsequently led to the change of the company’s logo, to repackage itself afresh as well as update its interiors, which it did in 2001.This led to increased output which made it pay off its outstanding debts in 2005.

Recommendations and Implementation

The recommendations are that the company had a good foundation that should help it grow. That the franchised stores that were opened in 1986, if sustained they would uplift the business financial returns (Wheelen & Hunger, 2010, p.22-1).

In addition, the restructuring of the company to franchising is a timely idea; however, it should cut across the whole US and not just a part of it. Good measures taken against the losses ought to objective out and not subjective. Repackaging was excellent, whereas using returns to pay off all debts was not just a good but also a wise idea for the factory (Wheelen & Hunger, 2010 p.22-9).

Furthermore, the implementation is appropriate after assessing in keenness the above recommendation. For instance, Repacking of the product should be consistent after assessing consumer demands from time to time.

Reference

Wheelen, T.L., & Hunger J.D. (2010). Strategic Management and Business Policy: Achieving Sustainability. London: McGraw-Hill.

Introduction

The fundamental motivation behind the establishment of Rococo Chocolate was the window of opportunity that existed in London. However, the passion of the founder of Rococo was also a key driving force. In addition to passion, profit maximization is also a main reason for the establishment of any business. A marketing plan critically examines the company in a holistic manner.

Moreover, it focuses on the marketing strategies, performance, strategic positioning, measures achievement, and evaluation of company objectives. In this case, Rococo Chocolate Company will be evaluated using two main approaches; these are SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis and PESTEL (Political, Economic, Social, Technological, and Legal Factors) analysis (Ferrell & Hartline 2008, Pp. 104).

SWOT analysis

Rococo Chocolates Company has various Strengths. When evaluating the strengths, we consider what makes Rococo Chocolate Company stand out from the rest, what it excels in, what unique expertise, and abilities the company posses. Accordingly, Strengths are both internal and external aspects. Rococo Chocolate Company produces a wide-range of chocolates.

This is due to prompt responsiveness in customer needs satisfaction. In light of this, the company won an award for changing the attitude of people towards chocolates. This clearly shows that they ahead in the market. In addition, they have a large number of outlets for their products across the country. Secondly, the company has established a school to teach people about chocolates.

This is because they are market leaders. They also organize events, which is a great marketing tool. However, it is also a major tactic of strategic positioning in the minds of consumers. Product classification according to accessions, person, and purpose is also a major strength. This includes chocolates for birthdays, weddings, and anniversaries.

When evaluating the weaknesses, we consider the competitive advantage of other companies in the same industry. What people think of as the company weakness and what the company can do better (Ferrell & Hartline 2008, Pp. 59). Rococo does not have an aggressive marketing strategy to push products to the market they still can do a lot more in respect to this. However, the company has managed to minimize on the weaknesses. This is a very positive approach in regards to company progress.

When evaluating the opportunities, we consider the area that the company can expand, new potential products to be developed, employing new technology for company advancement, and legal development. When examining Rococo Chocolate Company using these parameters, it has an opportunity to tap into the international market because of its level of excellence. Rococo Chocolate Company has also gained recognition as the market leader. This provides it a great opportunity to tap the top cream talent in the market.

When evaluating the threats, we consider changes in the legal framework that could affect the company negatively, environmental factors that could also have a negative impact on the company (Ferrell & Hartline 2008, Pp. 48). Threats emanate from the weaknesses of the company. Additionally other competitors capitalize on these weaknesses and pose as a threat to the company.

However, Rococo Chocolate Company has effectively established itself as the market leader. Due to this, it faces minimal threats from competitors. Never the less, environmental changes are inevitable, in the event of changes in the environment, the company will employ adoptive measures in dealing with it. The company pays close attention to the reaction of customers through feedback mechanisms and the chocolate blog on the website.

PESTEL analysis

When evaluating Rococo Company using PESTEL, we consider Political, Economic, Social, Technological, and Legal Factors. For instance, political factors include political stability and formulation of various laws such as taxes and pollution. However, critical consideration is on how these factors affect the company (Nwankwo & Gbadamosi 2011 Pp. 88).

The company is located in a politically stable country, and it is operating within the laws of the country. However, there are no new laws that the political elite have formulated that have a negative impact on Rococo Chocolate Company. Additionally, the government is encouraging entrepreneurs to be more aggressive, creative and innovate to promote business development.

Economic evaluation focuses on inflation, disposable income and the trade cycle (Beamish & Ashford 2005, Pp. 75). In regards to disposable income, Rococo Chocolate Company has sufficient income as reflected in the Annual financial statements of 30 June 2010. The total cash amounted to £ 70,019.

Moreover, it is a significant growth as compared to 2009 where the cash amounted to £ 41,426. Rococo Chocolate Company also has a good trade cycle as reflected in the Annual financial statements of 30 June 2010. The creditors falling due within a year amounted to £ 279,535 while the debtors were £133,983. This fosters Company growth because they have adequate working capital.

Social evaluation focuses on cultural values, consumer attitude, behavior, and beliefs. In this case, Rococo Chocolate Company has done significantly well. This is because of their customer blog section on the website, the chocolate school and the (Recognition for Excellence award 2011) awards won. However, on the technological front, which includes systems automation and use of customized software, the company has also done well because they have managed to automate its operations and it has very interactive website.

The legal aspects focuses mainly on legislation, as for Rococo Chocolate Company, there are no laws that negatively affect its operation. In fact, the year ended 30 June 2010 the company was in exemption as stated in section 477 of the Companies Act 2006 regarding small businesses.

Conclusion

In conclusion, Rococo Chocolate Company is making significant strides in business expansion and development. Both the SWOT and PESTEL reflect positive results when conducted on the company. However, the company has various aspects, which needs improvements, for instance, the customer service delivery. They need to develop personalized products. Additionally, the company needs to expand the market to an international level.

List of References

Beamish, K & Ashford, R (2005), Coursebook 05/06 Marketing Planning, Georgia Elsevier.

Ferrell, O & Hartline, M (2008), Marketing Strategy, Hampshire, Cengage learning.

Nwankwo, S & Gbadamosi, T (2011), Entrepreneurship Marketing: Principles and Practice of Sme Marketing, New York, Taylor & Francis.

Introduction

James Averdieck readily acknowledges the competitive nature of the food industry in Britain. Large multinationals daunt the industry thus are not ready to search for new customers.

Therefore, making entries into new markets is rather intricate. In the past seven years, GU has made significant progress in establishing its market niche by elevating its ability to enter new marketplaces thus rapidly expanding revenues (Averdieck 2011).

The management established that most customers buy their products from supermarkets and retail shops. The most effective way to market product entails linking up with strategic partner, advertising and ensuring that product quality does not depreciate.

Overview of the organisation

GU chocolate company focuses on the fabrication of confectionary products with puds as the main product. Launched in 2003, the entity has grown admirably. This is attributable to resilience of the management.

GU, which had three products, at the beginning has turned its fortunes around by rapidly expanding its product portfolio and now boasts of a wide variety of products. The subsequent founding of Fru, which is a sibling company, has helped GU to assert its influence in the market.

Their product includes mousses, cakes, chocks and other delicacies that are a preserve of the adults. Marketing of chocolate is very sensitive to packaging (Averdieck 2011). A professional management team led by James the founder of the institution heads the entity.

Their experience will count in trying to market their brand in a market that is very competitive. The expansive range of product that GU deals with helps in establishing its niche since it provides a large variety of products. The entity’s main strength lies in its experienced management and expanding market share.

The main challenge to this organisation is competition and the need to maintain appropriate quality (Perner 2008). For GU to survive the entity needs to offer more than what other ordinary Chocolate company’s offer.

Target market

Consumers of Chocolate Puds are adults. Such a target market has disposable income hence pricing should be moderate. Due to the product range, this entity offers, it can segment its market. GU’S customers are available in many countries in Europe (Averdieck 2011). Marketing will assist GU to make an entry in new lucrative markets.

Marketing Goals

GU puds aim at expanding its market share, a process that will require the management to enact several measures. To achieve an expanded market share, GU will have to launch an audacious advertising campaign that will draw new customers. Winning a significant fraction of the market will require creation a noticeable brand name to counter competition and assert influence in the market. Moreover, the entity would need to put in place appropriate strategies to ensure that the products reach the new target market, which is the major challenge to entities in such an industry.

Market strategies

In an industry, that has Multinational Corporation as players; a tender firm like GU will need to initiate effective strategies as the competitors have expansive financial resources. A forceful crusade in media that include Television and print media is necessary.

To enable GU compete with other multinationals, it can develop various products that suite different economic classes. This would allow the company to discriminate prices thus, reaping maximum profit (Perner 2008). GU will forge agreements with companies that can help in marketing products.

Airlines are perfect example as they address the needs of a noticeable fraction of clientele. GU’S product will be available as delicacies during the flights. The catering division, which promotes cuisine, will be pivotal in promoting puds as it sets the standards in the provisions industry.

A large proportion of puds reach customers through supermarket and retailing chains therefore, it is the management’s priority set up mutual agreement with their distributors.

Puds consumers are sensitive to packaging and quality (Averdieck 2011). GU must prioritize the enhancement of product quality in face of growing demand for their product. Packaging is crucial in confectionary products as it attracts customers’ attention. It is evident that poor packaging leads to dwindling sales.

However, there is minimal difference between products sold to the higher and lower end of the market. Evidently, the firms that distinguish the market exploit the value difference by offering classy packaging. GU will take up social responsibility in the different countries where it operates.

Social programs will help in building its corporate image and promoting the brand name thus boosting its sales. The above entity is expanding rapidly thus, it needs to initiate decisions swiftly.

Decision making needs logistical support and the planned creation of logistic department will be a plus in facilitating decision-making supported by research and data from the market. Obesity that is attributable to junk food like puds is on the rise.

In an effort to adhere to the various calls by social movements and governments, GU should create products that do not pose health concerns. Customers are scrupulous on the delivery time. Failure to make judicious delivery leads to lessening of demand.

In an effort to counter this, adequate supply, modalities ought to be in place. Customers have varying taste and GU will continue to expand its product profile to meet all customer tastes.

Implementation and Budget

GU ought to make investments in production thus satisfying its widening clientele. To maintain their quality, GU will need to invest in research to enhance preparation of quality products.

The managers will seek the expertise of an advertising specialist to make advertisements that will capture the interest of potential customer and draw them to the products. GU will plough back its returns from previous financial periods and seek further capital from financial institution.

Ploughed capital and loans will finance the expansion of production line and set up a research facility. To the airline corporations and hotels, the company will offer free sample to the various clients of these industries. Consultation with distribution outlets will assist in set up agreements to facilitate distribution of puds.

The execution of the above strategies will require financing. Expansion of production capacity and setting up of a research facility will be a fundamental undertaking for GU.

Thus, the entity will need to solicit funds from financial institution if the revenues are not adequate. GU will set aside funds to finance well-vetted social projects that promote the welfare of the members of public.

By creating an extra department, the organisation will need to spend more funds internally to equip the new department with the necessary labour and equipments (Averdieck 2011). Diabetes is a lifestyle disease, preventable by consumption of products that contain the various nutrients in appropriate proportion. GU has to ensure that its products contain the required nutrients

Conclusion

It is necessary to sum up the plan by highlighting the evaluation process. This step acts as a control measure to assess the progress of the strategies. GU’s marketing and the logistic unit will assess the change in sales since the initiation of the marketing plan.

Change in sales numbers will serve as the main assessment criteria of the plan. A negative change in sales revenue will imply that the plan has flopped necessitating review. An increase in revenues will indicate surging sales hence the plan is successful but need improvement.

List of References

Averdieck, J. (2011). Gü Chocolate Puds, Business Development Insight Web.

Perner, L. (2008) Food marketing, University of Southern California Web.

The final customer has always been the target for any product or service brought to the market (Macaulay 123). Such explains why businesses carry out campaigns aimed at creating awareness and brand recognition as a means of increasing the amount of company sales.

For this reason, it is important for businesses and organizations to make sure that their goods and services are customer-oriented. Nonetheless, the focus of a company’s ideas on customer orientation ought to include all the latest developments and improvement on the product.

Such considerations ensure that the product or service adequately meets the needs of the end consumer (Belliveau, Griffin and Somermeyer 12).

In addition, any product that is available in the market should ensure that it has featured all manner of innovations in terms of promotions and distribution approaches with the aim of succeeding in large market share.

Case Study: Premium Chocolate in UAE

Considering the case of chocolate consumption in United Arab Emirates, it is evident that the satisfaction of the final consumer is necessary. As such, this has an implication that customer satisfaction is an essential factor that chocolate manufacturers put into consideration before dispatching their chocolate brands into the market.

However, Macaulay (113) points out to several creative ideas that Premium chocolate manufacturers in UAE can adopt to ensure that they develop and improve their chocolate. Such approaches are aimed at boosting the customer care. However, most of the times such ideas are affected by the emerging trends in consumer behavior.

Creative ideas for Premium Chocolate Development and Improvement

The taste and preferences of the final consumers play a significant role in determining the market share of a particular organization’s product or service. For this reason, organizations ought to make sure that they are aware of the needs, taste, and preference of their customers.

Such knowledge has been cited by Macaulay (113) as significant in developing measures aimed at improving the level of consumer satisfaction on a particular product or service.

Radical change in the product

This change is associated with research and discovery on a given product as well as other types of activities that adopt creativity. Usually, the radical change is done following customer needs that are either unmet or unarticulated. The change can occur in terms of improving an available product in order to cater to the needs of the customer.

As such, the change goes through a development process and finally comes out with a new or an improved type of the original product (Belliveau, Griffin and Somermeyer 12). Evident, radical changes are inevitable since they help in developing as well as improving customer care.

For instance, premium chocolate can undergo radical change based on the recent studies that most of the people in UAE are obese. The radical change in such a scenario would lead to the adoption of alternative chocolate ingredients that would not result in obesity among consumers.

Incremental improvement on the product

Creatively, businesses can decide to improve parts of an existing service or product. Usually, in most of the cases, additional changes are implemented following a need to improve the product so that it matches the market value or customer demand.

Evidently, an incremental change in any form of product or service aims at improving customer care. In addition, the adoption of an incremental change should take consideration of the changing consumer behavior. Such changes ensure that the emerging issues about a product are laid out clearly, and the necessary improvement done.

Innovational promotional and distribution strategies to promote Premium Chocolate in UAE

Usually, businesses tend to make use of existing innovations as opposed to developing new ones. Nevertheless, the innovation that any business adopts depends on the needs of the business as well as the customer’s demand. As such, companies can make use of technology in promotional as well as in distribution of its products.

Business carry out product promotions with the sole aim of increasing their sales, attracting new customers, improving brand image as well as enhancing the brand identity. As such, businesses benefit from product promotion and distribution strategies in that they generate consumer demand.

In addition, such policies are beneficial to consumers in that they avail certain goods and services to consumers.

Following the growing competition, it is important for any business to ensure that they engage in promotional and distribution strategies that are based on innovation. Such a process will ensure that they remain in business.

For this reason, the Premium Chocolate manufacturers in UAE can adopt a number of the following innovational promotional and distribution strategies.

Robust sales activities

According to statistics released by the AC Nielson’s Retail Audit, the market for chocolate in United Arabs Emirates is drastically growing. It is estimated to have 27% and 14% value and volume growth respectively. Following such statistics, there is a high probability that the competition for the production of chocolate will increase.

In order to be competitive, therefore, Premium Chocolate should adopt robust sales activities that are based on innovation. The advancement in technology has led to improved ways of sales promotion due to the availability of online platforms. Online sales sites offer a reliable platform where businesses can meet potential clients.

However, in the case of premium chocolate, the sales activities ought to be directed at different groups. People falling in the 15-64 age bracket in UAE have been identified as target group for chocolate consumption and are thus very significant in determining market share.

Push and Pull strategies

Demand for a particular product calls for the push and pull strategies. Usually, a push approach to product promotion adopts an innovative design whereby goods and services are sold to resellers. Campaigns under the push strategies entail promotional features such as quality guarantee, free trials, and discounts offers.

Such proposals are likely to entice customers to make a purchase (McLean-Conner 21).

The pull strategy, on the other hand, depends on demand and targets the end user. Usually, customer care for any business may become low due the retailer becoming reluctant and thus fail to buy from the manufacturer. For this reason, companies should develop strategies (promotional and distribution) that are based on new technology.

Adopting such strategies places any business at the upper hand to avail goods to customers and to assess the level of their customer’s satisfaction.

Hybrid strategies

Hybrid approach uses technology to combine both push and pull approaches. As such, a business can make simultaneous initiative to end users and resellers. Such strategy is important since it ensures that the final customer gets a constant flow of products either from distributors or directly from the manufacturer.

From the above, it is evident that the strategy that a business adopts plays a significant role in determining how satisfied their customers are.

Works Cited

Belliveau, Paul, Abbie Griffin, and Stephen Somermeyer. The PDMA Toolbook 2 For New Product Development. Hoboken, N.J.: Wiley, 2004. Print.

Macaulay, Linda A. Case Studies In Service Innovation. New York, NY: Springer, 2012. Print.

McLean-Conner, Penni. Customer Service. Tulsa, Okla.: PennWell Corp., 2006. Print.

The case study indicates that Charles Chocolates is “a leading marketer of hand-wrapped chocolates, truffles, almond bark, brittles, caramels, nut-corn, and chocolate-covered ginger” (Zietsma, 2014, p. 2). The company was founded in 1885 thus becoming the oldest chocolate manufacturer in New England. Steve Parkland is considering various strategies in order to triple the company’s size within the next 10 years. However, the company should overcome various internal and external issues in order to emerge successful.

How Charles Chocolates can Deal with Internal Pressures

The internal environment determines the efforts and strategies embraced by a company in order to achieve its potential. Charles Chocolates should address various internal pressures before embarking on a journey to grow the firm. To begin with, the company is associated with poor stocking and planning practices (Zietsma, 2014).

Data distortions have been affecting the company’s productivity. A powerful inventory system will ensure every store has enough stock. Most of the sales agents are unaware of the benefits of different links. The firm should empower these agents in order to address the needs of more customers.

The company’s workers are against new ideas and innovations. Steve Parkland should present new ideas and technologies in order to improve the level of production. The company operates 11 retail stores across the country. New stores should be opened in order to increase the level of sales.

The firm should hire competent marketers and collaborate with different shopping malls (Zietsma, 2014). The number of online consumers has also been increasing steadily. Charles Chocolates should therefore have a powerful online presence in order to attract more consumers.

Internal wrangles have also been affecting the company’s success. For instance, Mary Bird has been disagreeing with Ray Wong thus affecting the company’s productivity (Zietsma, 2014). Decision-making processes are also troubled thus affecting the firm’s marketing processes.

New incentives are needed such as teamwork. The new president should encourage these individuals to work as a team. They should also focus on the best leadership approaches in order to make the company successful. New production capabilities should also be considered in order to produce superior products (Zietsma, 2014). A new growth strategy will eventually support Charles Chocolates’ goals.

Dealing with External Pressures

The company should also address some of the external issues affecting its future performance. For instance, the aging baby boomers are focusing on ethics and quality. The firm can therefore deal with this pressure by embracing ethical production processes. More people “prefer organic and dark chocolates because they have heart-healthy anti-oxidant properties” (Zietsma, 2014, p. 1). The company should produce such chocolates in order to achieve its goals.

Many consumers also want their companies to become socially responsible. The “idea of corporate social responsibility (CSR) is critical because many chocolate producers were engaging in forced and child labor” (Zietsma, 2014, p. 2). The issue of climate change is forcing many companies to embrace the best operational and packaging practices. The firm should therefore devise a powerful CSR strategy in order to address these needs.

Charles Chocolates is facing competition from companies such as Nestle and Lindt. Such companies have been producing and marketing quality products. Such products are marketed at cheaper prices. Other competitors include Delice Chocolates and Cardon’s (Zietsma, 2014).

Candy companies were also attracting more customers. The companies are also using powerful marketing strategies in order to emerge successful. Charles Chocolates should therefore use powerful practices in order to deal with competition. The firm should also produce new products that can satisfy the needs of its customers.

Reference

Zietsma, C. (2014). Charles Chocolates. Ivey Publishing, 1(1), 1-15.

Situational Environment

Demand/Demand Trends-Industry Trends

Euromonitor (2012) reported that Mars was the market leader in 2010 by holding 47% market share and Snickers, Galaxy, Nestlé and other international companies captured additional 30% share in the UAE; however, local companies concentrate on product diversification to increase market demand by changing customer perception; thus, the market growth has increased significantly.

Social and Cultural Environment Trends

The culture and society of UAE presents a unique set of values and beliefs that are characterised by most of the countries of the Middle East. As an Islamic country, the values and cultures of the UAE are governed by the Islamic regulations, and so the people of the country want to eat Halal foods only.

The population of the country comprises of different nationals and ethnic groups where the actual Arabic language are used besides of English (which is popular language in business and other areas of communication).

In case of the Countline Healthy Chocolate Bars, socio-cultural factors would have a great influence on the business, and the marketer would make sure that the contents of the product do not contain anything that are contrary with the Islamic values.

Economic Environment and Trends

Indexmundi (2012) reported that the UAE has an open economy along with economic diversification, which helps to develop the country than any other GCC member states.

The economic growth based on many sectors including oil; however, the GDP of the country is $ 342.0 billion and per capita GDP estimated as $ 63,626, and the GDP growth is 5.2%, which demonstrates the current financial progress of the UAE (Indexmundi 2012); at the same time, the economy remained unchanged at the time of global financial crisis.

However, the central bank has designed fiscal policy to provide a sustainable way for exempting the negative influence of recession; therefore, the following figure shows more information –

Economic environment is preferable to the foreign investors as the UAE has Efficient, Effective, and Globally Integrated trade Environment as a member of WTO; thus, the market of chocolate industry is too competitive due to have many competitors in this sector.

Technological Environment and Trends

The technological advancement of UAE is not less the advancement of the western countries, such as, the UK and the US; in addition, the use of Information technology brings huge economic success for this country particularly in Dubai where most of the business transaction takes place; moreover, foreign investors are now more confident to start business here considering excellent progression.

At the same time, technological invention will play a crucial role to develop strong supply chain manage system, promote new items, and expand business operation by preserving and producing the organic chocolate bars; however, the marketers of this will concentrate on e0commerce system in order to target customers in the global market particularly GCC countries.

Demographic Environment and Trends

Total population of the UAE in 2012 is more than 5,314,317 (annual growth rate 3.05%); however, 80% people among the total population comes from foreign countries particularly from third world nation to change their financial position and only 20% people are local citizens; however, the following tables give more information in this regard –

Figure 2: Age groups and Ethnic Group.

However, the marketers of this company will target people of different culture along with children and teenagers; they will more concentrate on Dubai, Abu Dhabi, and Sharjah market because 84% of total population lives in these three Emirates (CIL, 2012 and Indexmundi, 2012).

Political and Legal Environment and Trends

Tarbuck & Lester (2009) stated that the UAE has twofold legal framework (local and the federal judiciary); however, as a major Muslim country in the world, Islamic Shari’a law is the main source of legislation though civil law principles are using to mitigate or resolve the disputes; no foreign lawyer or firm permitted in the court.

Therefore, the legal system of UAE comparatively harder to follow, but the policy makers have taken many initiatives like developed Dubai as a free trade zone due to have port with other facilities; however, first apply federal laws, for instance, the Companies Law, or the Civil Code (Tarbuck & Lester, 2009, p.5).

Moreover, the UAE is a suitable place for the business owner because there is no political clash and have a stable political system; in addition, the Emirates cooperate with each other to develop the country, which help the government to enact laws for the development of the trade and commerce, such as, regulations to control non-free zones (Tarbuck & Lester, 2009).

On the other hand, certainty of leadership, relationship with foreign countries, principles of good corporate governance, transparency, anti-money laundering, and flexible taxation policies provide investors a significant when deciding to invest or carry on business (Tarbuck & Lester, 2009, p.9).

Competitive Environment

Existing Products Currently Satisfy the Same Need as Its Product

There are many national and international chocolate manufacturing companies in the UAE, but they are not concentrating on the organic chocolate bars, which indicate little pressure from competitors; therefore, Countline Healthy Chocolate Bars would be unique products in this market, for instance, Mars, Nestle, and Twix brands occupied large market share in UAE, but they are not trying organic product.

Competitive Evaluation Including Strengths and Weaknesses

Strengths

• Customer perception is changing over time;
• Countline Healthy Chocolate Bars would experience huge success due to lack of competitors in this sector;
• Efficient employees, promotional plan, strategy of the company, production costs, supply chain management;
• More than 75% People of the UAE like chocolate bars (Euromonitor, 2012).

Weaknesses

• Euromonitor (2012) reported that sugar and cocoa prices continued to boost in 2011, but the government had not taken any measure in this regard;
• Manufacturers reduce the weight of the products and sell chocolate within existing price;
• Customers of the UAE historically not craze to purchase chocolate, so the spend less for this product;
• Manufactures like to spend little for the promotional activities though the government provides incentive in some extent.

Evaluation and Detailed Assessment of Marketing Mix Strategy

Product

The marketer of the new organic chocolate will focus on creating a product with unique taste and flavour; in addition, the marketer will try to bring out a new demand for organic chocolates among the customers of the United Arab Emirates so that the children of this region could have better health even after ingesting excessive amounts of chocolate products.

As a result, the marketer feels it necessary to promote a range of healthy ingredients through the Countline Healthy Chocolate Bars, which, for example, would include some essential substances for human health, such as antioxidants, chromium (to control blood sugar), magnesium, theobromine (to kindle the central nervous system and appetite), tryptophan, caffeine, and flavanols (a unique blend of phytonutrients).

Countline Healthy Chocolate Bars would be tremendously nutritious; it would be a snack to generate the ideal infiltrator and would be the best chocolate ever; moreover, people in all places would have excellent benefits from the product; on the other hand, the organic chocolate would not harm the environment by any means during the entire production process.

The new product would contain as much antioxidant contents as a glass of red wine and would be free from chemical herbicides, fertilizers, or pesticides; however, it is notable that the phenols in the product will develop the immune system, lessen the risk of cancer, and endorse heart-health as well as promoting overall energy levels.

Price

The marketer of the new organic chocolate will set a general pricing structure based on a series of price levels for different pack sizes, which would characterise flexible and reasonable pricing based on features, customer demands, and so on.

As the business would focus on making loyal customers, it would offer the product at comparatively reasonable prices in order to ensure that the customers sustain with the brand even though there are other substitutes offered by established competitors.

However, low pricing strategy would be undertaken because of a number of factors, which, for example, include the following:

1. After the economic downturn, the purchasing power of the customers had reduced, which is still at recovering stage.
2. There are some established businesses, which offer similar or identical products.
3. The marketer of the new organic chocolate wishes to be the cost leader in the industry in order to gain competitive advantage.
4. It will purchase machines for the production process from the local market to reduce initial costs.

Promotion

The new organic chocolate should build strong brand image; therefore, it is important to point out its strengths through advertisements, which would assist the business to persuade the customers; in the content of the promotions, it would highlight the positive effects and emphasis on the importance of the chocolate in public health and environment.

It would use print media (like newspapers and magazines), radio campaigns, online IMC, outdoor IMC, and special campaigns through the social networking sites like twitter, Hi5, and facebook for advertisements; however, it will not be feasible for the business to promote itself through TV, as it would require huge investment.

Distribution

The organic chocolate would be distributed to various retail stores all around the UAE to make the product easily available to the end consumers. The distribution channel should be designed to make sure that the products are into shelves of the stores at regular intervals.

Reference List

CIL. 2012. United Arab Emirates Population. Web.

Euromonitor. 2012. Chocolate Confectionery in the United Arab Emirates. Web.

Indexmundi. 2012. Country Profile of the UAE. Web.

Indexmundi. 2012. United Arab Emirates Population. Web.

Tarbuck, A. & Lester, C. 2009. Dubai’s Legal System: Creating a Legal and Regulatory Framework for a Modern Society. Web.

The Hershey Chocolate factory is located in Hershey, Pennsylvania the home town of its founder Milton Hershey. Milton Hershey pioneered this company in 1894 as one of the outlets of his Lancaster Caramel factory and it has grown over the years to become one of the largest chocolate manufacturers in North America. Hershey Corporation’s 2012/2013 performance in the stock market is very impressive as indicated in the flow chart below;

Milton Hershey also created other units like the Hershey entertainment and Resort Company, to which the trust of managing Hershey Park has been entrusted; a chocolate-tagged entertainment center, Hershey park stadium strategically designed to host gaming events and amusement assemblies.

History

Milton Hershey started a candy retail unit in Philadelphia soon after completing his apprenticeship to a confectioner in 1873 which was to fail 6 years later for he was yet a novice businessman, not losing hope, he still ventured into the processing of candy in New York which did not thrive according to his projection, and so he went back to Pennsylvania.

In Pennsylvania, Milton Hershey tried to incorporate fresh milk in producing caramels and to his amusement he noted the rise in sales, this triggered him to establish the Lancaster Caramel Company. Having acquired chocolate processing machines from the sale of the Caramel factory, he abandoned the production of caramels for the long term production of chocolate, citing the narrow future of caramels to be the main drawback.

He build a chocolate factory in his native town and he was accommodating to all the folks, thus he availed amusement units and leisure sports which made him very popular and saw the exponential growth of his chocolate factory. In 1896, Milton established a unit which enabled him to circumspectly refine the most ideal recipe for milk chocolate candies.

This paved the way for later modifications in which he was more interested with the conventional synthesis of candies than the quality of the milk. Early in the 20th century, Hershey unraveled a minute flat-bottomed conically shaped product which was later dubbed ‘Hershey kisses’. At first Hershey kisses were manually wrapped, but some twenty or so years later, the manual process was replaced with a more effective mechanized way of wrapping: this was made possible by the invention of wrapping machinery.

Yet still, even in the mechanized wrapping method, a minute paper ribbon has to be retained at the top of the product ‘Hershey Kisses’ to certify and authenticate that the product is genuine. Currently the statistics of production in the Hershey chocolate company stands at about eighty million Hershey Kiss units per day.

Apart from the Hershey Kiss other products include – but not limited to; Mr. Goodbar which has a substantial amount of peanuts, a mildly sweet dark chocolate, Hershey’s syrup not overlooking the crisp rice Krackel bar which was introduced soon before the second world war. (Selko, 2012, p. 1)

One of the great minds to have worked with Hershey was Harry B. Reese, he started at a very humble position as a dairyman in one of the Hershey Estates, but with time he rose along the ranks to work in Hershey’s Company. This notwithstanding, Reese later engineered a wide variety of candies whose sales – with Hershey’s logo, soared beyond his wildest expectations.

Having mastered the art of chocolate production and the intricate matters of advertisement, Reese established his own chocolate company in 1926 and by 1941 he was overly occupied in developing his own confectionery genius product, the so called peanut butter cup, whose sugar content was far much lower than that of any other factory at the time.

Unfortunately, Reese passed on in 1956 leaving the management of his enterprise to his 6 sons, but in 1963 Hershey chocolate company bought Reese’s company for an approximate value of $23.3 million at which time Reese’s revenue was about $14 million each year, this saw Hershey’s company expand tremendously to the esteemed status of being one of America’s chocolate iconic company.

As it is the manner of life, Hershey Chocolate Corporation has had its share of challenges, for instance, just towards 1940s there was the drive by CIO to restructure and re-organise factory workers which polarized the prevailing peaceful working environment and triggered labor unrests coupled with friction between the stakeholders.

Later on the American Federation of Labor streamlined the legal framework governing factory workers and employers and in its intervention it appointed John Shearer to herald the plight of workers in Hershey’s Chocolate Factory. (The Hershey Company, 2013, p. 1)

Just within the pre world war II period, William Murrie’s son Bruce settled an agreement with F. Mars, which would see them produce a hard sugar-coated candy which would later be tagged M&M’s, the deal gave F. Mar a upper hand because he would scoop 80% interest. Mars later acquired Bruce’s share which bequeathed him with a competitive advantage against Hershey’s Corporation.

Late 2007, there was an outcry that Hershey’s packaging of ‘Ice Breakers Pacs’ was similar to a certain illegal drug packaging, such complaints were highly welcomed by the Hershey Foundation and the relevant department did some modifications in the packaging of ‘Ice Breakers Pacs’.

In 2008, MSNBC raised yet another alarm over the manner of production of some of Hershey chocolate items, but the corporation was prompt in its response concerning the matter and cited the change to have been aimed at lowering the production cost without necessarily affecting the prevailing prices of the commodities, as highlighted in the flow chart above.

Abandoned Products

In 2006, one of Hershey chocolate factories was closed down for a time and quite a number of its products were abandoned owing to concerns about salmonella contamination which may have happened during the process of production.

In 1998, a substantial number of chocolate bars were abandoned for there were claims that they had a certain amount of almonds in them, but the specification of almonds were not posted among the ingredients.

Criticism

There are assertions that Hershey is weak when it comes to spelling its position about humane and ethical acquisition of cocoa, and so it may be stated that its scores are not pleasant considering the extent to which it advocates for fair trade.

Hershey Corporation is accused of using forced, trafficked and child labor in its acquisition of cocoa from West Africa, not being transparent when it comes to accounting for its sources of cocoa, in this respect therefore, little is known to the public about the extent of the investment done by Hershey Corporation towards ensuring a sustainable supply of cocoa in the catchment zones.

On this account the International Labor Rights Forum has challenged Hershey Corporation among others to abolish forced and child labor and thus merit 100% fair trade certification.

How to Apply Lean and Total Quality Management for Hershey’s Chocolate Factory

The strategy of lean and total quality management is basically a team-based approach aimed at ensuring a sustainable top quality service delivery by eliminating any destructors like non-value added practices or ‘waste’ from the perspective of the customer. Although this concept has been on the front line of industrial management for a long time, it is only recently that it has been tested in the supply chain and logistics management front.

The SCOR model of Lean quality management highlights the necessary steps which ought to be taken to ensure a successful outcome; these steps are Plan, Source, Make, Deliver and Return. This approach is most ideal in specifying lean opportunities in the supply chain, it is also applicable in identifying loop holes ‘waste’ in the entire production exercise and thus address such challenges closing the open gaps and eliminating the ‘wastes’.

The management of an iconic firm like Hershey chocolate factory is depended on several factors of production and consumption; the tenets of management comprise of: planning, organizing, leading, and controlling. All these tenets of management are subject to the prevailing internal, external, global, technological and ethical environment.

Plan – Sales and Operations Planning (S&OP) process is very crucial in strategizing on how much should be produced for the available market, for instance the state of the U.S economy must be born into consideration during the planning phase.

The number of consumers who may readily buy Hershey products this year may reduce significantly due to the heightening cost of such staple goods like eggs, milk and bread as compared to the total number of consumers last year. Of necessity therefore is the need for Hershey’s administration to have as more sensitive foresight than ever before. (Myerson, 2012, p. 1)

Organise – the organization process demands that all the strings of production and sales be pulled together for a coherent whole, as such all the resources are strategically synchronized towards the greater good of the entire Hershey Corporation. It basically entails sourcing for the raw products like cocoa through fair trade procurement channels, including also Vendor Managed Inventory or VMI and using the raw products in the manufacturing process.

Once the product has been made say chocolates, deliveries are made, in which case there is the need to keep the transport costs as low as possible. Hershey’s management has to certify the quality of imported raw materials and in case of any shipping mistakes, a return for the same is demanded. This makes the quality of the raw materials to take the central role in the production process.

Differentiation allows Hershey products to bear a unique quality of their own, a quality which is entirely different from that of Hershey’s competitors.

Lead – for the workers in Hershey to perform to their optimum, they need a visionary leadership which is always ready to motivate the workers. As such the workers need to be proud of their achievements and have a sense of ownership in the welfare of the Hershey Chocolate firm.

The workers need a constant reminder that they are indispensable, valuable and of great worth to Hershey Corporation and such should be celebrated in remunerating the workers handsomely, observing the legal framework of labor contracts, rewarding extra-ordinary achievements of the workers. Cost Leadership; a low-cost approach aimed at closing all the loop holes of production and optimizing on the returns

Control – the progress of Hershey Chocolate firm need to be evaluated continuously, proper monitory procedures and systems must be developed so that any areas which warrant some modifications may readily be attended to. In this manner therefore, the overall performance of the entire Company should always be kept in focus through an explicit filing system, so that, at a quick glance one can be able to review the prevailing market scenario.

Reference List

Myerson, P. (2012). Lean Supply Chain Management: What is it and Why Should You? Care? Web.

Selko, A. (2012). The expanded West Hershey facility is one of the company’s largest Capital investments and represents one of the largest construction projects in Pennsylvania in two decade. Web.

The Hershey Company. (2013). Social Responsibility; environment. Web.

The Street. (2013). The Hershey Company (HSY), NYSE: Consumer Goods. Web.

Wikinvest. (2013). Hershey Foods (HSY). Web.

Introduction

As consumers, we play a vital role in the growth and development of companies and national economies. The decisions we make about different products affect the value chain processes that characterize the production of the same (Mittal & Ravinder, 2012). For example, consumer decisions could affect the demand for raw materials and the deployment of workers in different workplace processes.

The chocolate industry is not immune to these intrigues. Although this multi-billion dollar industry is complex and wide, the development of niche products within the last decade has characterized recent developments in the sector. The niche is for locally grown and organic foods (Young, Hwang, McDonald, & Oates, 2010).

Different studies have reported contradicting reports regarding the impact of organic labeling on the purchase and consumption of consumer products (Young et al., 2010). While some research studies show that most consumers are insensitive to organic labeling, others show that such labeling could affect the purchasing behaviors of up to 55% of customers (Aertsens, Verbeke, Mondelaers, & Van Huylenbroeck, 2009).

Kollmuss and Agyeman (2002) also say that most consumers who understand the term “organic foods” are likely to support their production. However, studies from Janssen and Hamm (2012) dispute this fact by suggesting that an understanding of the term “organic” does not have a strong effect on consumer support, or disapproval, of organic products.

Based on this assertion, some researchers suggest that the knowledge/understanding of organic foods is not important in the formulation of purchasing foods; instead, they suggest that consumer perceptions and attitudes towards a product’s label are important in influencing such decisions (Zander & Hamm, 2010).

Based on these insights, there is a consensus among many researchers who suggest that taste and knowledge are the greatest determinants of consumer perceptions and attitudes about products. This consensus is mostly dominant in the chocolate industry.

Indeed, for a long time, people have associated chocolates with “good taste, positive feelings, sweetness, feelings of warmth and calories/energy” (Gámbaro & Ellis, 2012, p. 15). Different types of chocolate (white, creamy, and milky chocolates) have different types of taste perceptions. For example, many customers have associated milky chocolates to be creamy, while others have associated dark chocolates to have an intense taste (Mittal & Ravinder, 2012).

Taste is an important factor in the understanding of consumer purchasing decisions because researchers rank it as being among the most relevant factors in the development of consumer purchasing behaviors (Fernqvist & Ekelund, 2014). According to Zander and Hamm (2010), ethical factors surrounding the conception of the term “organic” also ranks high in the list of factors that affect consumer purchasing decisions.

At the same time, the researchers say the taste of chocolates and their health issues affect consumers’ purchasing decisions. Based on this understanding, Aertsens et al. (2009) say that organic labeling could potentially share a close relationship with taste factors when developing consumers’ purchasing decisions.

According to Fernqvist and Ekelund (2014), organic foods have a negative correlation with the taste of chocolates because researchers have demonstrated that many consumers perceive organic foods as having a “less positive” taste than non-organic foods. For example, some studies have shown that many consumers perceive organic cookies as being “less tasty” than “regular” cookies (Fernqvist & Ekelund, 2014).

Nonetheless, some studies have shown that 30% of consumers often perceive organic and regular foods as having the same taste (Mittal & Ravinder, 2012). Based on this understanding, taste is a major factor in the development of consumer purchasing decisions.

Knowledge is also an important concept in understanding consumer-purchasing decisions because many researchers have demonstrated that understanding the constituents of organic products affects consumer perceptions of foods (Ajzen, Joyce, Sheikh, & Cote, 2011). In this regard, it is important to investigate whether such knowledge affects consumer-buying decisions for chocolate products.

Similarly, it is important to investigate whether consumers need such knowledge when making the decision to purchase organic or “regular” chocolates. Relative to this view, understanding why consumers purchase specific goods or services helps to explain why some customers have a liking for certain types of products.

The current study will focus on expounding on this assertion by investigating how the knowledge of organic foods could influence the purchasing decisions of customers of varying knowledge. It also seeks to examine the extent of its influence on the purchase of foods that have the organic label and those that do not have this label. The research aim is as follows

Research Aims and Objectives

Research Aim

Understanding the influence of organic labeling on consumer willingness to pay (WTP) for chocolate, relative to knowledge and taste factors.

Research Objectives

• To investigate the impact of organic labeling on their willingness to pay for chocolates
• To find out the effect of consumers’ understanding of the term “organic” on their willingness to pay for chocolates
• To investigate the influence of organic labeling on consumers’ ranking of WTP

Hypotheses

Hypothesis 1: Consumers would give a high WTP for products labeled as organic

Hypothesis 2: Consumers that understand the concept of organic foods would have the highest WTP for chocolate products

Hypothesis 3: Consumers would have the highest WTP for tasty chocolate foods, regardless of whether the products have the organic label, or not.

Justification for Hypotheses

The first hypothesis stems from research studies that have demonstrated the strong impact of organic labels on consumer purchasing decisions. For example, studies by Fernqvist and Ekelund (2014) demonstrated the effect of organic labeling on consumer’s estimation of calorie consumption. The same studies have shown that the presence of organic labeling has a positive effect on nutritional evaluations (Fernqvist & Ekelund, 2014).

Studies that have investigated the influence of organic labeling in the beverage industry have also shown similar findings because they demonstrate that organic labeling helps customers to develop a positive liking for beer (Aertsens et al., 2009).

Nonetheless, independent studies have shown that only 55% of consumers could develop a liking for beer this way (Aertsens et al., 2009). Relative to these findings, Janssen and Hamm (2012) say that different customers have different sensitivities for the presence of organic labeling in a product. This analysis alone reveals that organic labeling could influence only 50% of consumers. These findings informed the first hypothesis, which proposed that most consumers would give a high WTP for products labeled as “organic.”

The justification for the formulation of the second hypothesis emerges from research studies, which have investigated the influence of knowledge on consumer purchasing behavior (Fernqvist & Ekelund, 2014). Such studies have also shown that some consumers understand the concept of organic foods, while others do not (Fernqvist & Ekelund, 2014).

Studies by Ajzen et al. (2011) reveal that more than half of consumers do not understand the concept of organic foods and their influence on human health. Studies by Kollmuss and Agyeman (2002) reveal that this problem stems from the insufficiency of information regarding such foods. Studies by Young et al. (2010) reveal that student consumers have the most positive perceptions of organic foods because they understand the concept.

In fact, this demographic believes that organic foods are necessary and beneficial (Young et al., 2010). Studies that support this narrative reveal that the higher a customer’s knowledge about organic foods, the higher their tendency to develop a positive attitude towards them (Fernqvist & Ekelund, 2014). The justification for the development of the third hypothesis stems from these research studies, which have shown that taste is an important factor in the development of customer purchasing decisions (Gámbaro & Ellis, 2012).

Justification for Study

Kollmuss and Agyeman (2002) emphasize the importance of understanding product attributes as those intrinsic and extrinsic factors that could affect consumer-purchasing decisions. According to Young et al. (2010), tangible and intangible factors have the same effect on consumer purchasing decisions.

For example, there is little (or no) compelling evidence to suggest intrinsic and extrinsic factors have a strong impact on customer loyalty. Based on this understanding, Young et al. (2010) suggest that most companies should be more preoccupied with explaining how many attributes are associated with their products and their consumer purchasing decisions, as opposed to merely identifying the attributes that characterize their products.

References

Aertsens, J., Verbeke, W., Mondelaers, K., & Van Huylenbroeck, G. (2009). Personal determinants of organic food consumption: a review. British Food Journal, 111(10), 1140-1167.

Ajzen, I., Joyce, N., Sheikh, S., & Cote, N. G. (2011). Knowledge and the prediction of behavior: The role of information accuracy in the theory of planned behavior. Basic and Applied Social Psychology, 33(2), 101-117.

Fernqvist, F., & Ekelund, L. (2014). Credence and the effect on consumer liking of food–A review. Food Quality and Preference, 32, 340-353.

Gámbaro, A., & Ellis, C. A. (2012). Exploring consumer perception about the different types of chocolate. Brazilian Journal of Food technology, 15(4), 317-324.

Janssen, M., & Hamm, U. (2012). Product labeling in the market for organic food: Consumer preferences and willingness-to-pay for different organic certification logos. Food Quality and Preference, 25(1), 9-22.

Kollmuss, A., & Agyeman, J. (2002). Mind the gap: why do people act environmentally and what are the barriers to pro-environmental behavior? Environmental education research, 8(3), 239-260.

Mittal, P., & Ravinder, D. (2012).Consumer Buying Behavior & Perception towards Chocolates Brands and Its Consumption. International Journal of Business and Management Tomorrow, 2(9), 1-10.

Young, W., Hwang, K., McDonald, S., & Oates, C. J. (2010). Sustainable consumption: green consumer behavior when purchasing products. Sustainable development, 18(1), 20-31.

Zander, K., & Hamm, U. (2010). Consumer preferences for additional ethical attributes of organic food. Food quality and preference, 21(5), 495-503.

Executive Summary

The market is incredibly attractive because of access to necessary resources. Franchising is a selected mode of entry in this case. A line of chocolate bars is proposed. Significant product-line adaptations will not be needed, and this aspect will be controlled by Cadbury. A use of TV commercials and social media are suggested as primary tools of promotion.

Introduction

The primary goal of this report is to provide all the necessary information regarding a business proposal on the territory of Tanzania. The country has been developing at rapid rates and the demand for quality products is incredibly high. Moreover, companies have access to enormous amounts of resources that are not fully utilized. The chocolate industry is especially fascinating because the number of firms that operate in this sector is relatively small. Finke (2010) suggests that the problem is that most cocoa beans are transported overseas, and the industry is dominated by Westerners. Meissner (2012) thinks that it should be viewed as an outstanding opportunity to open up a business in Tanzania, and it would be beneficial to a company that has enormous experience in this area.

Cadbury has access to all the necessary tools and instruments that can be used to ensure that the process is successful, and business is profitable. Furthermore, it is important to analyze the situation in the country to get a better understanding of its unique aspects and how they may be utilized to improve the efficiency of operations. One of the most significant advantages that Cadbury has is its production techniques, and the company is likely to adapt. Bienen (2015) believes that many enterprises are too worried about such aspects as the climate, and they think that it may complicate the process of production. Furthermore, this indicates that it would be necessary to build a set of facilities with this aspect taken into consideration. The number of freezers even in the most developed cities is limited, and it would be beneficial to establish long-term relationships with supermarkets and shops in this region and provide them with a broad range of benefits.

Lofchie (2014) argues that another issue that should not be overlooked is that an enormous percentage of the population prefers products that were produced by natives. Moreover, it would be wise to conduct a marketing program that would be focused on benefits of this product and explain why this brand can be trusted. It is paramount to understand that consideration of cultural aspects is vital in this case. The problem is that an enormous percentage of the population does not have access to information and are primarily focused on agriculture. Also, many individuals do not like innovations and prefer traditional approaches. However, there have been many businesses that were successful over the years. The role of social responsibility also has been increasing, and it should be viewed as an excellent opportunity to provide people in this area with work and support. Another issue that needs to be discussed is economic freedom. The situation has been improving, but it is entirely possible that it will have an impact on the ability of individuals to make purchases. Overall, GDP growth that has been shown is enormous, and it is expected that the situation is going to improve in the future. Also, the inflation is not as a significant problem as it used to be and it has stabilized recently.

Market Audit and Competitive Market Analysis

Product Evaluation

The product will be perceived as innovative by target market because of unique packaging, and a variety of tastes is also a significant advantage. However, it may not be viewed as compatible with the current behavior of consumers because they prefer products that are not that flashy most of the time. There would be no difficulties with a use of this product in most cases. Stufflebeam et al. (2014) suggest that trialability should be considered in this case, and it is entirely possible that some types of products will have to be excluded. The level of observability is also significant, and a lot of individuals will be able to see the impact of this innovation. Venuvinod (2011) thinks that It is not possible that there would be any risks related to bad experience because the product has been tested. However, it is possible that some sellers will not consider such factors as the need to monitor the temperature, and it may lead to unpleasant situations. Moreover, the firm should devote significant attention to this aspect to ensure that the number of such cases is limited. The biggest problem that may occur is that the product will be met with negative reaction, and it would be reasonable to present the company as socially responsible. Hopkins (2012) believes that it would be important to participate in a range of activities that would help to protect the environment. Another aspect that is worth mentioning is that the company can be quite flexible and is willing to make changes if it is necessary.

The Market

Geographic Regions

The product will be sold in the territory of Tanzania because it is a region that has captured the interest of many tourists. Mayallah (2014) argues that it will be possible to establish long-term relationships with Kenya because it is interested in Tanzanian products and is willing to invest enormous amounts of funds into the transportation. Moreover, it is entirely possible that the business will be able to expand, and the products will be delivered to nearby countries.

Transportation and Communication

It is necessary to mention that all of the standard tools of transportation can be used in the country. The sector is well-developed, and it is not likely that any significant issues will occur. African Development Bank (2013) suggests that resources may be transported with a use of vehicles or shipping. Moreover, use of railways may also be considered. Such communication tools as the Internet and cell phones are available in the region.

Buying Habits

It is imperative to mention that the consumption of such products has been increasing, and customers prefer to stay loyal to one brand. Sanchez (2014) states that expatriates and people with high income prefer supermarkets most of the time. The population likes products that are simple and only make purchases from trusted sources.

Distribution

Numerous outlets are operating on the territory of the country, and it would be beneficial to consider and exclusive contract with selected few. Mayallah (2014) thinks that Nakumatt should be viewed as an outstanding choice because it has connections with Kenya and it is entirely possible that a relationship with this company would help to promote the product.

Compare and Contrast

Competitor’s Product

One of the primary competitors is Chocolate Mamas. Reuters (2015) describes it as an organic chocolate that is positioned as hundred percent African. Packaging is relatively simple and cheap, but it is well-designed and attracts customers.

Competitor’s Prices

The products that are offered by the competitor are sold at premium prices in shops and hotels that are aimed at people with high earnings. Moreover, it is sold for approximately ten thousand Tanzanian shillings. Fifield (2012) argues that it should be viewed as a significant advantage by Cadbury because the company provides products that are much cheaper.

Competitor’s Promotion

A competitor company has a well-developed website that has all the necessary information. Also, the company is utilizing social media such as Facebook to promote its products. However, it is evident that the firm does not devote enough attention to advertisements, but it is planning to expand in other regions so it is entirely possible that a marketing campaign will be initiated.

Competitor’s Distribution Channels

Chocolate Mamas (2016) describes itself as a relatively small firm, but it has established connections with all the biggest outlets on the territory of Dar es Salaam and now sells its products in Zanzibar and Arusha.

Market Size

Industry Sales

It is necessary to note that the market is not yet well-developed, and it is entirely possible that the company will have to take some risks. 4-Traders (2016) states that there have been two million fair trade chocolate bars sold during the last year according to the statistics.

Company Sales

Moreover, it is expected that the demand is going to increase significantly, and the firm expects to gain at least 1 million in sales thanks to a well-developed marketing campaign and innovative approach.

Government Participation

Agencies

Regus (2015) suggests that is an outstanding choice because it is a firm that has enormous experience in this industry and has helped a lot of companies to deal with some of the most common issues. Moreover, the company will be able to provide consultations regarding all critical aspects, and it has locations in close to 120 countries.

Regulations

The company will have to go through a range of procedures. For instance, it is necessary to get a license, and immigration may also be quite problematic in some cases. Embassy of Tanzania (n.d.) suggests that rights of employees are also actively protected, and minority investors are also protected.

Preliminary Marketing Plan

Mode of Entry

Peng (2010) believes that franchising is a reasonable choice in this case because it will be viewed as a significant advantage over competitors. The biggest benefit is that Cadbury is a brand name that is known all over the world, and an enormous percentage of the target market is expatriates. Reinert (2011) states that the focus on tourists is also critical because they would prefer to buy a reliable product while on the territory of the country.

Marketing Objectives

The product will be aimed at expatriates, tourists, and upper class. Kabwe (2013) argues that the problem is that numerous social issues are present in the country, and many people would prefer to minimize expenses on other goods. The company is expected to make significant profits and gain an excellent position in the market.

Product Adaptations

How et al. (2014) state that the fact that the trademark is known all over the world is a benefit that needs to be utilized. Moreover, it is not likely that any changes will be required. Packaging needs to be redesigned to provide customers with all the necessary information about the components in their native languages. A product line will consist of three type of chocolate, and it can be expanded in the future depending on the situation in the market. Pride et al. (2010) suggest that the product will be easy to recognize thanks to unique packaging, and the company will try to differentiate the goods from those offered by competitors.

Promoting Strategy

TV commercials will be necessary in this case. Iacobucci (2014) thinks that such tools as social media can be utilized to advertise the company and a broad range of products. Richter (2012) believes that the primary objective of promotional activities is to draw attention to the product and to ensure that consumers have an understanding of its benefits. Moreover, it would help to get an enormous competitive advantage. Kaynak (2013) argues that a global campaign should be preferred in this case because the product must be popularized all over the region.

Distribution Strategy

The approach that has been selected will be focused on the delivery of products from the manufacturer to retailers, and to consumers after that. Dent (2011) notes that this strategy is appropriate in this case because relationships with brokers and distributor may be complicated because of such factors as the need to keep products under particular temperature, and it is not likely that many of them would be willing to buy freezers. Brady (2014) believes that partners should be provided with a broad range of benefits because long-term relationships would be valuable. Issues with counterfeit products are not expected.

Pricing Strategy

Expenses on shipment and transportation will be minimized because the product will be produced on the territory of Tanzania, and there is access to enormous amounts of resources. Shipping and transportation are relatively cheap in the country, and it will not have a significant impact on the cost of the product, and price. Majaro (2013 ) mentions that the demand for such products is incredibly high, but it is entirely possible that the pricing strategy may have to be altered if new competitors appear or market situation changes. Boone et al. (2014) think that the number of competitors is rather limited so it will be beneficial to set a low starting price. Moreover, it can be increased in the future if the firm will be able to establish a following and develop relationships with consumers.

The government of Tanzania has several limitations that could affect the pricing strategy because it is focused on the support of the national economy. U.S. Department of State (2013) suggests that Tanzania is determined to ensure that firms have equal opportunities, and it is entirely possible that the company would not be able to take advantage of all the resources that are available. It is imperative to mention that the exchange rate has been unstable lately. However, it can be viewed as a benefit, and it will be capable of getting significant profits in the territory of the country. Also, there are no limitations on cash transfers, and it should be viewed as an enormous advantage in this case. The product will be positioned as an affordable chocolate that is primarily aimed at expatriates, tourists, and upper class.

Conclusion

In conclusion, it is evident that this proposal has a range of benefits that should not be overlooked. One of the most significant advantages is that the company is quite experienced in this industry, and numerous marketing strategies have already been developed. Moreover, it is not necessary to develop new advertisements, and promotion techniques have proven to be effective. However, numerous barriers are still present. Many companies that are focused on the production of chocolate have been hesitant about business in this area because of the economic situation and prefer other approaches.

References

4-Traders (2016) Nielsen: All is fair in coffee, chocolate and wine. Web.

African Development Bank (2013) Transport sector review. Web.

Bienen, H. (2015) Tanzania: Party transformation and economic development. Princeton University Press, Princeton, NJ.

Boone, L., and Kurtz, D.L. (2014) Contemporary marketing. Cengage Learning, Boston, MA.

Brady, D.L. (2014) Essentials of international marketing. Routledge, Abingdon-on-Thames, UK.

Chocolate Mamas (2016) Where to buy. Web.

Dent, J. (2011) Distribution channels: Understanding and managing channels to market. Kogan Page, London, UK.

Embassy of Tanzania (n.d.) Laws and regulations. Web.

Fifield, P. (2012) Marketing strategy. Routledge, Abingdon-on-Thames, UK.

Finke, J. (2010) The rough guide to Tanzania. Penguin Random House, New York, NY.

Hopkins, M. (2012) Corporate social responsibility and international development: Is business the solution? Earthscan, London, UK.

Hoy, F., and Stanworth, J. (2014) Franchising: An international perspective. Routledge, Abingdon-on-Thames, UK.

Iacobucci, D. (2014) Marketing management. Cengage Learning, Boston, MA.

Kabwe, Z. (2013) Defining middle class in Tanzania is difficult. The Citizen. Web.

Kaynak, E. (2013) International marketing: Socio-political and behavioural aspects. Routledge, Abingdon-on-Thames, UK.

Lofchie, M.F. (2014) The political economy of Tanzania: Decline and recovery. University of Pennsylvania Press, Philadelphia, PA.

Majaro, S. (2013) International marketing. Routledge, Abingdon-on-Thames, UK.

Mayallah, E. (2014) Tanzania becomes target for Kenyan retailer. East African Business Week. Web.

Meissner, H.G. (2012) Strategic international marketing. Springer Science & Business Media, Berlin, DE.

Peng, M.W. (2010) Global business. Cengage Learning, Boston, MA.

Pride, W., and Ferrell, O.C. (2010) Marketing express. Cengage Learning, Boston, MA.

Regus (2015) Thousands of businesses start up with Regus. Web.

Reinert, K.A. (2011) An introduction to international economics: New perspectives on the world economy. Cambridge University Press, Cambridge, UK.

Reuters (2015) African cocoa a golden ticket for Tanzania chocolate factory. Web.

Richter, T. (2012) International marketing mix management. Logos Verlag Berlin, Berlin, DE.

Sanchez, D. (2014) How African consumer habits are changing. AFK Insider. Web.

Stufflebeam, D.L., and Coryn, C.L. (2014) Evaluation theory, models, and application. John Wiley & Sons, New York, NY.

U.S. Department of State (2013) Investment Climate Statement – Tanzania 2013. Web.

Venuvinod, P.K. (2011) Technology, innovation and entrepreneurship part II: My firm. Lulu Press, Raleigh, NC.

Location and Layout

It should be mentioned that the stores of this company are located mostly in tourist destinations such as Boston’s Back Bay and Bar Harbor. Moreover, the products of this organization can be purchased through various retailers and ship terminal locations. The main limitation of this approach is that it makes Charles Chocolates too dependent on the trends of the tourist industry. This problem influences many businesses that serve mostly the needs of tourists (Lubbe, 2000).

Therefore, the company should re-consider their current policy. In particular, they should open their stores in large urban areas located in New England; for instance, one can mention Boston, New Haven, or Worcester. In this way, the management will be able to attract new customers who may buy the company’s products on a regular basis. In addition to that, the company should promote the opening of franchise shops because this strategy can increase the number of sales outlets. This is one of the issues should be taken into account.

Additionally, much attention should be paid to the layout of their stores. The main task is to make sure that clients enjoy spending time at these places. As a result, they are more attached to this brand. One should mention that store design can become a source of completive advantage for many businesses such as Apple, Inc (Ebster, 2011).

These sales outlets of Charles Chocolates should exhibit the diverse range of products offered by Charles Chocolates. By increasing the number of such stores, the company can promote their brand (Mesher, 2010). Furthermore, the visitors of such stores can have a positive perception of the company’s products. These are some of the suggestions that can be offered.

Purchasing and Inventory

At present, the company faces problems related to the inventory control because many of its stores are often out-of-stock. As a result, many clients become dissatisfied with the services of this organization. In contrast, other stores often have the surplus of goods that are not required by customers.

This is one of the points that should be considered. This difficulty indicates that the company is not able to gather information from its stores. Furthermore, this organization has to keep high levels of inventory. As a result, the company is forced to incur additional expenses that weaken its financial performance.

Overall, these problems can be partly addressed by implementing data management systems which can demonstrate whether a particular store currently has the necessary products. These information technologies will use the sales data which can show how the level of inventory changes with time passing (Choi & Kim, 2001, p. 5). Furthermore, the sales data are also critical for determining the level of supplies that the company should have in order to meet the demand of various clients.

Production

Much attention should be paid to various issues related to production. Overall, one can say the company determines the volume of output by relying on historical sales data, but this information does not reflect the variations in demand. The management should adopt the production system which can be adjusted to the changes in demand level (Feld, 2000).

This goal can be achieved by adopting the principles of lean manufacturing (Feld, 2000). Finally, the company should identify distinct criteria according to which the performance of workers should be evaluated and rewarded. This policy can increase their productivity. These are the main recommendations that can be advanced.

Reference List

Choi, W., & Kim, Y. (2001). Has Inventory Investment Been Liquidity-Constrained? Evidence from U.S. Panel Data. New York, NY: International Monetary Fund.

Ebster, C. (2011). Store Design and Visual Merchandising: Creating Store Space That Encourages Buying. New York, NY: Business Expert Press.

Feld, W. (2000). Lean Manufacturing: Tools, Techniques, and How to Use Them. New York, NY: CRC Press.

Lubbe, Berendian. (2000). Tourism Distribution: Managing the Travel Intermediary. New York, NY: Juta and Company Ltd.

Mesher, L.(2010). Basics Interior Design 01: Retail Design. New York, NY: AVA Publishing.