Donald B Chocolate Company Marketing Environment Analysis - Free Sampl

Question: Discuss about the Donald B Chocolate Company Marketing Environment Analysis. Answer: Introduction Market Environment Analysis is the most appropriate and adequate method to arrive at an understanding related to surrounding of an organization(Aaker, 2008). Donald B is a chocolate maker in Melbourne and also has two stores. In order to grow its brand in national and international markets, it has to develop strategies in order to cope with markets. The scope of the study analyses buyer behaviour in the market, microenvironment, macroenvironment and competition analysis for the Company to understand possible impact on its business. Buyer behaviour is a complex type of outcome in which a potential customer acts connected to a decision making for a purchase. Chocolate is a favorite product that attracts almost all variable type of demographics, hence analysing them further will help segment the market appropriately and cater to the same(Magretta, 2013). Donald B will be able to design marketing mix in an appropriate manner by analysing the complex buyer behaviour of consumers in the market also influence them. A consumer while making a purchase decision related to any product goes through a complex cycle of decision making on basis of their need based analysis system. The Company makes a varied type of products as cocoa product, confectionery, crystalized or glazed fruit, liquorice, marshmallow, drinking chocolate, candied nut, candied popcorn and so on. A wide range of factors impacts buyers while they making decision for purchasing a particular product as cultural factors, social factors, personal factors and p sychological factors(Hawkins, 2010). The factors acts within the complex system in which buyers takes decision related to a particular product. Varied behaviour of a buyer is dependent on brand of the product, in case there is significant difference between brands then buyers will react in a different manner compared to when there is almost nil difference between them. There can be two types of behaviour of buyers as high involvement and low involvement behaviour. The product made by Donald B does not significantly differ from other brands that offer chocolates(Solomon, 2012). Hence it is expected that in case a buyer is highly involved in purchasing chocolates regularly there will be less dissonance reducing buying behaviour. Meaning ones buyer recognizes need for purchasing chocolates, he or she will visit a particular store assess the alternatives available and post evaluation of alternatives will make a purchase. Most of the products offered by Donald B is low involvement product apart therefore, a consumer is less likely to face dissonance in their buying behaviour. In case of global expansion if the Company decides to manufacture high involvement product in chocolates as boutique chocolates or specialty chocolates, then its brand presence is bound to play a huge role. Most of the products that are manufactured by Donald B is low involvement product as consumers generally makes purchase of chocolates from impulse, as when influenced by kids or women. It is necessary that buyer outcome in case of products that are offered by the Company will be a habitual buying behaviour arising from factors as children present in family, women who like chocolates. Melbourne is a city with relatively stable population and consumers having spending power compared to suburbs. The Company with its two stores hence is able to cater to large number of customers in the city and also those coming to the city from suburbs for job purpose. In case the brand is able to deliver expected taste as per preference of consumers in chocolates, it is likely to have regular consumers that make purchase of its product. Microenvironment Chocolate is a highly liked product amongst multiple segments of consumers. In Australia prevalence of a number of chocolate makers and their presence in the market makes it difficult for a Company to establish a stable set of customers. Micro-environmental factor analysis relates to prevailing conditions within the industry that allows the Company establish a suitable position. While a Company as Donald B relatively new in the market compared to existence of multiple traditional chocolate manufacturers in the market establishes its business it faces a number of challenges. Most important factor that has impact on the Company is the forces that buyers or publics poses. As discussed earlier with emergence and prevalence of a number of chocolate manufacturers in the region, buyers or the publics have tremendous variety to make their purchases from(Australia, Retrieved on 31st March 2018). Buyers are offered with varied types of chocolates with varied types of prices. Across national as well as international markets buyers have presence of a large number of brands to select their products from. They can select from a wide range of the product available across the market. In this scenario presence of the brand or brand loyalty will make significant difference in purchase behaviour of the consumer. The industry in which the present Company is competing can expect high levels of switching behaviour amongst buyers. The product manufacturer has to design strategies to make its products widely available and accessible to consumers and at affordable rates. The brand can also provide added advantage as discounts, free gifts to lure customers more towards making brand purchase. The Company also has to make high investments into promotional activities such that publics recall value is high. The analysis proves that the brand experiences high pressure from its consumers due to a number of factors. A Company is able to establish and expand its business on basis of supplier relationship, which provides raw materials to the Company. Supplier power over a Company determines its success or failure in the market. Most integral raw material for manufacturing chocolate is cocoa. Australia manufactures small amounts of cocoa in its Northern and other parts. Production and supply of Australia is well regulated by Governmental engagement and with presence of Unions in the region. Fair trade agreements prevent cocoa producers being exploited in the region and majority of chocolate manufactures gets their supply of cocoa from Australian agriculture itself. Due to high demands of cocoa, suppliers tend to charge high prices which remain stable throughout the year. Presence of Supplier Unions prevents any process of bargaining from taking place and chocolate manufactures across the country are served on similar rates. Donald B being a relatively smaller manufacturer catering to demands in Mel bourne experiences significant power threat from suppliers of cocoa. In case the Company decides on global business, then it has to ascertain a cost effective supplier from Africa, that manufactures large quantities of the product. In such cases as well the Company will face significant pressures due to established chocolate businesses around the world getting their raw materials from there. Therefore, it needs to sell at a price that covers its cost price for cocoa and cannot afford rates below that. Competition Analysis Donald B wants to expand its companys operations in national as well as international markets. The Company will have to encounter several competitive pressures from national as well as international companies. Chocolate manufacturing is a highly lucrative industry due to prevalence of wide range of customers. Moreover, chocolate manufacturers that operate on international scale operates on costs competitive basis with their suppliers being based in Africa, manufacturing plants based I n less developing countries and so on(Armstrong, 2014). Internationally Donald B has to compete with Cadbury, Mars, Ferrero Rocher, Toblerone, Godiva, Ghirardelli, Patchi and many more. While national competitors constitutes Crest Chocolates, Chocolate Gems manufacturers, Melbas Chocolates, Charleys Chocolate Factory, Haighs Chocolates, FMI Australia Pty Ltd, Chocolate Apple Factory and many more. This implies that competitive pressures are tremendous on the Company on national as well as on for interna tional basis. National level chocolate manufacturers have established their businesses since a prolonged time hence have supplier value chain and distribution relationships as well. National chocolate manufacturers sells products through multiple avenues, through their own stores, also through retail and convenience stores. The product being a low involvement one requires brand presence or presence of the product across multiple locations for high sales to take place. Donald B though has considered selling its chocolates through Coles, Woolworths and Aldi or other specialty stores have not been successful in doing so. Meaning the product presence or brand presence of the Company is significantly low and very few buyers are aware of the products. It implies that the Company in order to cater on national basis has to first make its products available across a wide range of stores and then assimilate consumer response to the product. Once it offers its products across national platform will it be abl e to successfully understand the competitive pressures and then design marketing strategies accordingly(Esch, 2008). It has to maintain a steady shipment or continuous supply of the product to gain brand prevalence in the market, while maintaining price competitiveness. In the international markets as well the Company will face tremendous competitive pressures and it has to cater to its products at cost effective rates. It also needs to establish a value chain of distribution by making tie-ups with large retailers to cater to larger segment of consumers. Macro-environment Analysis Macro-environmental factors are those forces that the countrys environment implies upon the Companys operations. Donald B is currently catering to Australian markets hence macro-environmental factor related to the Australia will apply on it. Australia has a stable political system. Bureaucratic intervention into businesses is minimum, where businesses are merely required to obtain trade license from Chambers of Commerce and pay their taxes in it. Being a political democracy, businesses receive tremendous impetus from the government to establish and flourish their businesses. Economic environment within Australia is also stable with stable currency rates(www.businessinsider.com, Retreived on 31st March 2018). Markets are stable in Australia and inflation rates are low. There is low rates of unemployment within the country. The Company will not face any negative influences from the economic factors in Australia. Socially, Australia comprises of a mixed population. High and robust popul ation with stable number of immigrants offer large number of consumers for an y products to businesses. Maximum part of the society is aged below 60 years of age meaning they have high propensity to spend. Technologically Australia is quite developed where companies can easily offer their products through ecommerce platforms. The Company can easily sell its products through ecommerce website or by making tie-up with other ecommerce portals. Cultural factors as make chocolate a well-liked product within the country. With growing young and robust segment of the population, most like consuming energy bars as a healthy snack or chocolates for meeting their empty calorie needs. Internationally however there is bound to be several impact from macro-environmental forces(Ferrell, 2012). The Company will need to comply with laws and regulations within the country that it operates and caters to. It has to obtain trade license, Food and regulation authority certification and any other certific ation as deemed appropriate. Moreover the Company has to comply with their political and cultural system prior to catering their products. Conclusion Analysing above macro-environmental and micro-environmental factors implies that the Company can easily expand its business operations nationally and internationally. It however has to comply to norms and regulation of the country and area of operations. Analysis of competitive forces and consumer behaviour will help the Company to cater to products in a well fashioned manner. Reference Lists Aaker, D. K. (2008). Marketing research. John Wiley Sons. Armstrong, G. A. (2014). Principles of marketing. Pearson Australia. Australia. (Retrieved on 31st March 2018). Market Research Report. https://www.marketresearchreports.com/countries/australia. Esch, F. R. (2008). Marketing. John Wiley Sons, Ltd. Ferrell, O. C. (2012). Marketing strategy, text and cases. . Nelson Education. Hawkins, D. I. (2010). Consumer behavior. Implications for marketing strategy, 5. Magretta, J. (2013). Understanding Michael Porter: The essential guide to competition and strategy. . Harvard business press. Solomon, M. R.-B. (2012). Consumer behaviour. Pearson Higher Education AU. www.businessinsider.com. (Retreived on 31st March 2018). Australian Interst Rates. https://www.businessinsider.com.au/why-australian-interest-rates-are-unlikely-to-return-to-pre-gfc-levels-2017-2.