Background of the Company
Consumer plays an important role in the health of the economy in a country. Consumer behavior affects the business of an industry. Success and failure of an industry depend on the consumer behavior (Solomon, 2014). However, in the context of chocolate industry consumer behavior is an essential part. For this industry, it is important to understand the liking and disliking of the consumers towards this product. In order to gain the competitive advantage in the market demands of the consumer should be identified by the organization. This study deals with the marketing procedure of Donald’s company, which is a chocolate maker in Melbourne. Besides identifying the consumer behavior, a marketer should carry out an industrial analysis based on the micro and macro environmental elements. Establishment of the customer-centric business is crucial for the chocolate industry to achieve success in the market. Hence, for the success of an organization, any business needs to provide its concentration towards the customers.
Background of the Company
As per the given scenario, Donald B is the owner of Donald’s company that is a chocolate making industry in Melbourne. This organization wants to compete with its larger rivals by producing the cocoa product, drinking chocolate, candied nut, marshmallow and glazed fruit products. They sell their product through Woolworths, Aldi, and Coles across Australia. In Australia, changing consumer preference is a big challenge for the chocolate industry according to the IBIS world industry report (Ibisworld.com, 2018). Hence, for this organization, it is crucial to understand the current demand of the consumer and makes a customer-oriented service (Goh, Heng& Lin, 2013). However, consumer prefers gourmet products, which are healthier for them. In the context of Donald’s company innovation of new products will be helpful to compete in the current market. On the other hand, development in the product feature as per the current market demand is crucial for this organization, as they want to expand their brand nationally and internationally.
Macro environmental analysis
Macro environmental analysis can be done by using PESTLE analysis. This will help the current situation of Donald’s company in Australian market and the impact of different environmental factors on it.
Political factor
Political environment leaves a big impact on the business of a country. However, the political environment in Australian is stable (Kew &Stredwick, 2017). However, the stable political environment of Australia allows Donald’s company to enhance their business in Australia. In the Asia-Pacific region, Australia is one of the major markets for the MNCs. Hence, this will bring opportunity for Donald’s company to enhance their business nationally.This organization can utilize the political stability of Australia. This helps them to introduce new product across Australian market.
Importance of Understanding Consumer Behavior for Chocolate Industry
Economic factor
An economic factor is a major element of the external environment in the context of any business. In Australia, property prices are high as a result there is a high demand for the rental property.Due to high property price Donald’s chocolate company will face issue to establish their manufacturing hub. In this situation they need to invest more in purchasing property for their business, which may affect their profit margin. However, the GDP is high in Australia and it is one of the largest capitalist economies in the world (Morris &Metternicht, 2016). On the other hand, Australia has got the 10th position in the business index. This highlights the business opportunity in the context of Donald’s business. Continuous economic growth and inflation are the major strengths of Australian economy. On the other hand, low unemployment is another positive outcome of Australian economy. This country has a stable economy and open market for any business with minimal restriction.
In the context of Donald’s company, such stable economy of Australia will help this organization to enhance their business at a national level. In order to grow a business, it is crucial for a business to operate in a country that has a stable economy. According to the IBIS report, it a strong Australian dollar makes the imported goods cheaper. As a result, the purchasing cost becomes cheaper than the manufacturing cost.
In the context of chocolate industry, the expected growth of the industry is 2.2% over five years. Due to the low operating costs Donald’s company can grow in Australian market properly as they can minimizes their manufacturing cost and enhance their growth by increasing the profitability.This will cause inflation in AUD as business growth leaves a big impact on the Australian dollar by enhancing the purchasing power of the customers. If the manufacturing cost is low then the price of the product will decrease as result purchasing power of the consumer will be increased. On the other hand, increased price of cocoa is a major reason for the reduction of the profitability of the chocolate industry (Kremer &Symmons, 2015). Hence, Donald’s company has to face such economic challenge while enhancing their business.
Social factor
Social factor refers to the beliefs and behavior of the people. However, Australia includes diverse people (Markus, 2014). Hence, different people include different features and different cultures. Society has a wide influence on the chocolate product. Demographic factor highlights the age group of the people. However, for the children age group of 5 to 15 chocolate is a preferable food.
Carrying out Industrial Analysis for Chocolate Industry
On the other hand, it is also preferable for the teenagers. Apart from the children, adult people have the strong addiction towards the chocolate. In the recent years, Australian consumers become health conscious, which leads the chocolate industry to produce a healthy product. Due to the increasing rate of obesity, people focus on the healthy food products. However, fast food is a major reason for obesity and chocolate is one kind of fast food, which is eaten by the children(Kremer &Symmons, 2015). Hence, increasing health consciousness will affect the production of Donald’s company. In order to grow the business, this organization needs to develop a customer-centric business. For this purpose, they need to offer the organic chocolate product, which will influence the health-conscious customers in Australian as well as global market.
Changing demand of the customers is another social trend that affects a product or service (Edwards et al., 2015). In the context of chocolate industry, it is often difficult to cope up with the changing demand of the customers. IBIS report shows that over past years the consumers have given their concentration towards the health conscious products.
For this reason, the chocolate industry needs to improve the raw materials that are used by them for the production of chocolate. Consumer prefers antioxidant that is present in cocoa. Hence, more use of cocoa will increase the production cost(Kew &Stredwick, 2017). Therefore, a cultural trend is a big factor that influences the production of chocolate in Australia. However, different cultures have different preferences regarding the product. Thus, Donald’s company needs to understand the different cultural trends while offering a new product in Australia as in this country cultural diversification is a big part.
Technological factor
Technological advancement refers to the rate of technology changes and automation. Creation of new process and the new products are associated with the modern technology. Technology is involved in the reduction of operation cost, improvement in the quality and enhancement of innovation (Davies & Kitchen, 2015).
DSTO or Defense Science Technology organization and CSIRO or Commonwealth Scientific and Industrial Research organization are two organizations those are associated with the Australian government development and research. Such two organizations provide technological and scientific assistance to the business industry. This will enable Donald’s company to improve their business in Australia and the international market. Therefore, Australia is a technology-oriented country thus; Donald’s company can improve their product quality and reduce the business operation. On the other hand, a bus using such emerging technology this chocolate company can improve their logistics process worldwide, which will lead their business at national and international level.
Establishing a Customer-Centric Business for Success in the Market
Legal factor
Legal issues occur while operating in the international market. It is important for Donald’s firm to keep a close eye on the legal system while operating in a new country (Ramli, 2017). Introduction of the legal changes in Australia will affect the business of Donald’s company. Incompliance with the legal norms may force the organization to change their operational activities.
On the other hand, the cost of a firm can be affected by the legal changes in a country. Australian legal system focuses on the independence of the judiciary. Therefore, a demand for a product can be influenced by the legal changes. For Donald’s company, they need to comply with the legal requirements in Australia and outside of Australia to avoid any legal issue in their business.
It is important for this organization to understand legal norms in a foreign country while operating their business in a global level.As per the Australian Consumer Law it is important for Donald’s company to reduce any unfair activity from their business to reduce customer resistance. On the other hand, introduction of GST in Australian business market is major legal change that applies to reveal the service tax over the imported goods. If Donald’s company needs to enhance their business internationally then they need to follow the rules of GST otherwise they cannot be able to import the products.
Environmental factor
Weather and climate change are the major environmental factors. However, climate change leaves the impact on the industrial operation. Major climate change brings the threat of global warming (Moorhead, 2016). Hence, it is crucial for every business to make their business environmentally friendly. Donald’s company needs to follow Environmental protection Act 1974 to understand the importance of environmental sustainability in their business. However, in the present time, people are more conscious about environment protection. Thus, maintenance of the environmental sustainability will enhance the brand image of Donald’s company. As a chocolate production industry, Donald’s company needs to reduce the waste during their production. It will helpthem to develop an environmentally friendly business.
Competitor Analysis in the context of Donald’s company
Import of the chocolates has been increased in Australia due to the high domestic demand. On the other hand, Mork Chocolate Brew house and Koko Black are the popular chocolate manufacturer in Melbourne. Such two organizations are the major competitors of Donald’s in Melbourne. Mork Chocolate Brew house offers hot chocolate to the consumers and such product makes them unique in the Australian chocolate industry (Morkchocolate.com.au, 2017). They focus on the ingredients and the quality of the product. However, this organization is famous for the production of drinking chocolate and it makes this organization unique. On the other hand, this organization provides chocolate at a reasonable rate. Therefore, Koko Black offers cocoa product and candid nuts.
Competitive Landscape of the Chocolate Industry
Mork Chocolate Brew house the major competitor of Donald’s companyfollows premium price and enhancement of the quality of the product.This competitor mainly offers cocoa products that contain high quality. This covers a large portion of the Australia market.Such two competitors are famous for drinking chocolate and cocoa product.
In order to compete with these organizations, Donald’s company needs to create product diversification. However, product diversification will be helpful for this organization to achieve competitive advantages in Australian market and the global market. The above two competitors of Donald’s company focus on the quality of the product and their main target is to establish a customer-centric business. Development of the customer-centric business needs a high-quality product (Thaichon et al., 2017). Hence, for Donald’s chocolate company they need to understand the current market trend and demand to establish a customer-oriented business to gain competitive advantage.
Micro environmental factors
Several micro-environmental factors are associated with the success and value creation of a business. On the other hand, such factors are involved in establishing proper communication and delivery process in a business. Such environmental factors enable a business organization to prepare their business planning in a proper way. The micro-environmental factors are as follow:
Employees of the organization
The employees are a vital economic factor in the business. However, in order to gain success in a business skilled and qualified employees are required (Maina, 2017). To make a business technology oriented effective, skilled and motivated employees are required. In the context of Donald’s company, they aim to expand their business national and international level. Thus, they need more skilled and effective staffs to create the value of their business and communicate with the customers. However, an effective employee is able to make an effective communication with the customers that will be helpful for this organization to improve the business operation and to understand the demand of the customers. Delivery is a part of logistics hence, recruitment of the skilled employees will enable Donald’s organization to improve their delivery process inside and outside the country.
Customer
Consumers leave a great micro-economic impact on a business. However, it is hard for a business organization to achieve profit without influencing their target audience (MarjanovaJovanov, Davcev&Boeva, 2016). Hence, first, the organization needs to identify its target customer and then communicate with them regarding their business. Development of a customer-centric business is ideal for Donald’s company to understand the customer needs regarding the chocolate product. Marketing approach plays an important role in influencing the customers. However, if this organization adopts a proper marketing approach then they will able to get a significant outcome in their business through creating business value in the customer domain.
Competitors
Competitors are considered as the micro-environmental factor. As discussed earlierin the context of Donald’s company, Mork Chocolate Brew house and Koko Black are their two major competitors in Melbourne. Such two organizations focus on the quality of the product. However, a large number of competitors in the industry highlight the high demand for the product and services (Hatton-Jones et al., 2017). Therefore, product differentiation is required to compete in a market segment composed of many competitors in the same industry. Donald’s company needs to make the variety of chocolate product to make their business unique in the global chocolate industry. However, increased competition may affect the business of Donald’s company. Thus, it is crucial for this organization to carry out a competitor analysis before the introduction of new product.
Supplier and distribution channel
Supplier and distribution channel are important micro-environmental factors. However, a strong distribution channel is required to take the product from inventory to the delivery location. Manufacturer relies on the suppliers of raw materials. On the other hand, the resale companies depend on the wholesaler to transport the goods (Maloni, Hiatt &Astrachan, 2017).
In the context of Donald’s company, they mostly depend on the suppliers for the raw materials of their chocolate products. Distribution channel and supplier play an important role in generating a value of the business in customer domain. It is a major responsibility of the business organization to deliver a complete product to the consumer domain. Hence, a proper distribution channel will allow Donald’s company to communicate with the suppliers and the customers. However, the suppliers hold power for a business as the supplier’s product is the core part of the finished product. Hence, to deliver finished product suppliers play an important role in the context of Donald’s company.
Investors
Investor helps an organization to grow. However, without a strong fund, the business industry cannot operate a business in national and international level (MarjanovaJovanov, Davcev&Boeva, 2016). Donald’s business can take help from the creditor however, they need to repay with interest at a proper time. Hence, this organization gets support from the investors during any risk, which will allow them to create a value of their brand in customer domain.
Function of general public and role of media
Media and local community influence the ongoing business of an organization. The community often provides support to the business organization by providing pay tax, job, and opportunities to carry out the environmental and social responsibilities. On the other hand, different media like television, newspaper, and social media play an important role in developing brand image of an organization (Castillo et al., 2017). In the context of Donald’s company, support from the local community and various media will enable them to develop their brand value in the national and international chocolate industry.
Figure 1: Micro-environmental factors
(Source: Maloni, Hiatt &Astrachan, 2017)
SWOT analysis
s Marketing, 1-14.
|
S-Strength
· Product diversification · Strong funding · Strong logistics and strong human resources · Wide variety of the chocolate · Customer-oriented business · Stable political condition of Australia · Skilled employees |
W-Weakness · High cost of the product · High operation cost and lack of technically advanced employees · Expansion of the business only in the local market |
|
O-Opportunity · Expansion of the business in international market · Economic stability of Australia · Cover a large population of health-conscious customers · Introduction of new product in the market |
T-Threat · Changing demand of the customers · Huge competition in the local as well as international market · Rising price of cocoa |
Table 1: SWOT analysis of Donald’s Company
Analysis of strength, weakness, threat, and opportunity in the context of Donald’s company
Product diversification is a big strength of an organization as it leads the organization to attract the customers easily (Gallo, Antolin-Lopez &Montiel, 2017). In the context of Donald’s company, they focus on the product diversification and product variation. This is a big strength of this organization. On the other hand, they have skilled and efficient employees,
which is a key to success. On the other hand, their logistics is very strong. This will help them to enhance their business at the international level. However, a strong supply chain management is required to market the product at international level. Therefore, the stable political environment in Australia provides a good opportunity for this organization to enhance their business in across Australian chocolate industry. In the Australian market, there is a high demand of the chocolate product, which is a big strength of Donald’s company.Apart from these strong human resources and good economic stability are major strengths of Donald’s company. These allow them to enhance their business in national and international market.
High price of the product is a major weakness of Donald’s company as it only covers the premium customers. On the other hand, a high price of the product resists the middle-class customer to buy these products (Jewett, 2017). High operation cost is another major weakness of Donald’s company, as it affects their profit margin. It is crucial for an organization to reduce the operating cost and to maximize the profitability.
Therefore, in the context of Donald’s company their business is limited only in Australia that is a big weakness of this organization. They need to make their business global to enhance the brand image and sales revenue generation.One of the major weaknesses of Donald’s company is the lack of technical staff. This organization has good workforce but few technical experts, which hinders its growth and innovation.
Donald’s company has an opportunity to expand their market share in the global market and reach to international market. Due to the high demand for the chocolate, this organization will be able to introduce a new product in the chocolate industry. They get an opportunity to differentiate their product. On the other hand, economic stability of Australia makes their business more flexible. However, a large portion of the Australian people become health conscious (Leissle, 2017). This leads Donald’s company to introduce an organic chocolate product and to cover a large portion of the health-conscious customers from the different geographic region.
Changing demand of the consumers is a big threat for the chocolate industry according to the IBIS report. However, it is often hard for Donald’s company to offer a product to meet the changing demand of the customers. On the other hand, emerging competition in the local and global market is a big threat to any business, which affects the business of an organization (Maloni, Hiatt &Astrachan, 2017). In the context of Donald’s company, they have local competitors in Melbourne, which may create a barrier for their business. One of the greatest problems of this chocolate manufacturer is the rising price of cocoa. However, cocoa is a primary input of the chocolate product. Thus, rising price of cocoa in worldwide will increase the manufacturing cost of this business.
Consumer Behavior Analysis
Attitude is considered as the stable opinion including emotional and cognitive element. Consumer attitude is associated with the consumer behavior. However, the consumers buy the product, which is their favorite (Dholakia, Dholakia&Chattopadhyay, 2017). Hence, it is essential for the business organization to identify the consumer behavior towards their product or service. Application of the multi-component model is helpful for an organization to understand the consumer behavior. Belief is the first component of this model.
The consumers may possess positive and negative belief towards a product. The second component highlights the affect, which means that the consumer holds some feelings regarding some product. The last component of this model is the behavioral intention, which focuses on how the consumer’s response to a product. Customer believes that a chocolate industry should give them quality and healthy product at a reasonable price. However, Donald’s company tries to give quality and organic product at an affordable price, which ensures that this organization is trying to meet the needs of the consumers.
Application of this model will be helpful for Donald’s company to understand the customer value and belief regarding the product. In the context of chocolate product sustainability label such as nutrition label will empower the consumer to buy and consume this product (Jones et al., 2017). However, in the recent years, people are more health conscious and they prefer the organic and healthy product.
Thus, a chocolate product with sustainability label will influence the consumer behavior towards this product.In this situation the current trend of the customer is the major factor. This influences the chocolate industry to innovate healthy product to meet the current need of the market and to grasp the growth of the industry. This method motivates the consumers and influences their purchasing behavior. Brand of the chocolate is a big factor that influences the buying behavior of the consumer. However, often the customers buy chocolate from their favorite brand. On the other hand, a popular brand can easily attract the consumer. Nutritional quality of the chocolate plays a major role in influencing the purchasing behavior of the consumers.
Health restriction and allergies are major factors that often resist people to buy chocolate (Surasvadi, Tang&Vulcano, 2017). Apart from this flavor of the chocolate is another factor that affects the consumer behavior I the chocolate industry. In the context of Donald’s company, it is crucial for such organization to analyze the major factors to understand the current market demand. As per the present market trend consumer, prefer healthy food products. Hence, by offering an organic chocolate product such organization will be able to enhance the purchasing power of consumers towards their product.
Conclusion
The entire piece of work focuses on the marketing planning in the context of Donald Company. However, this company produces chocolate and distributes the products in Melbourne. In order to lead the business at the national and international level, this organization needs to carry out a macro and micro environmental analysis. From the above study it has been found industrial analysis based on the macro and micro-environment highlight on the stable political environment, high property price in Australia, high demand of the customers and trend of the competitors. On the other hand, behavior analysis of the customer shows that today customer prefer high quality and healthy product at a low price. Donald’s company is trying to fulfill this current need of the customers that is positive for their business growth.
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