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Confectionary products have become essential food commodities today and a regular food for most Australians. Fulgoni (2018) suggested that for a confectionary business to succeed, the entrepreneur must establish an effective marketing plan which will help achieve the desired market competitiveness and sales revenue. There are several other pieces of research that have highlighted the case for marketing plans for chocolate and confectionary businesses. For instance, Morgan et al (2018) found that effective marketing plans help increase the sales volume of confectionary products and promote the business’ profit margin. Based on this evidence, this report aims to emerge with a comprehensive marketing plan for Mr. Donald’s proposed confectionary company. The report will first identify the buyer behaviour of confectionary products before delving into both the macro and micro business environments of the business. Similarly, there will be an evaluation of appropriate marketing management strategies which will basically entail a discussion of the confectionary’s target market, the proposed market segments and how the business will achieve its competitive advantage. The report will then explain the proposed confectionary’s marketing mix (product, pricing, and distribution) before ultimately providing a summary of recommendations to steer the business towards its objectives.
Evidence from Morgan et al (2018) and McCollough & Shook (2017) indicate that the importance of conducting a market analysis for any business cannot be overemphasized. According to Moorman & Day (2016), market analysis enables the entrepreneur to identify any market factors that may affect the normal operation of or have an impact on the business. Against this backdrop, this section will begin with an examination of the firm’s potential buyer behaviour, before highlighting the business’ microenvironment (suppliers, the public, and competitors) and the microenvironment. Finally, in this section, there will be an analysis of the key environmental factors that might affect the confectionary’s operation.
Vlasic et al (2017) defined buyer behaviour as the systematic approach taken by customers when making buying decisions or during the purchase process. The table below highlights the potential cultural, social, personal, and psychological buyer behaviour of the confectionary customers:
Table 1: An overview of buyer behaviour
Influences |
Definition |
Characteristics of consumers of baked goods |
|
Cultural |
Culture |
Consumers of chocolate and confectionary products are likely not to buy the products when they have expired or nearing their expiration (Zheng 2017). |
|
Subculture |
Studies by Picard et al (2018) reveal that most confectionary product consumers are likely not to pay more for the products than food products from other industries |
||
Social class |
Rao & Sivakumar (2017) claim in Australia, confectionary food products are consumed by people across all socioeconomic classes depending on the price levels and affordability |
||
Social |
Groups |
Confectionary products are consumed by members across all social groups including sports and aerobic clubs and well as professionals (Zeriti et al 2014). |
|
Family |
Research by Setaadi et al (2017) indicate that mothers have a larger influence on the purchasing process of baked products within the family |
||
Personal |
Health and lifestyle |
Ramaseshan et al (2013) argue that most consumers of confectionary products are guided by their health needs and how the product resonates with those needs. |
|
Psychological |
Attitude |
According to Wright et al (2017), most consumers of confectionary products in Australia are guided by their attitudes which emanate from the information they acquire about the confectionary brand from their respective social groups. |
Efanny et al (2018) defined the microenvironment as the individually distinctive factors that affect a firm’s sales environment and that the firm is not able to control. Hence, according to the author, the microenvironments include the various factors that control the operations of the firm and are related to the firm’s stakeholders but cannot be controlled in by the firm. Hence, this section will evaluate Donald’s confectionary suppliers, competitors, and the publics; and the influence they might have on the business.
Confectionary businesses depend on numerous suppliers and intermediaries who facilitate and might be a challenge to the success of the business. According to Dadzie et al (2017), they may include: suppliers of ingredients (wheat flour, sweeteners, oils, and confectionary mixes), suppliers of electricity, and packing material suppliers among others. When the ingredients suppliers increase the price of their supplies, the confectionary may have to adjust its pricing and this may affect its sales revenue in the short-run (Mintz & Currim 2013). The authors comment further that Electricity shortage may also interfere with the production process and the final outcome of the products.
Buyer Behaviour
The publics include any individual who might have an interest in the business or who can help or hinder the confectionary’s smooth operation (Abedi & Abedini 2017). One such important group is the finance public who provide start-up funds. According to Garg et al (2016), failure to relate well with the financial public will hinder the firm’s ability to access funds. Other important public includes the media – who are responsible for the public relations activities such as advertisement of vacant positions in the new business.
Based on the reports by Luan & Sudhir (2010), the new confectionary is likely to face direct competition from Australia’s leading confectionary products manufacturers such as Acb Suncity Pty Ltd and The Australian Sweet Co.; as well as indirect competition from pasta and fast food producers such as 7 Chefs and Just Pasta. 7 chefs and Just Pasts are considered indirect competitors of confectionary products because consumers always substitute confectionary for pasta (Sudhir 2010).
Direct Competitor |
Products |
Target Market |
Market Positioning |
Acb Suncity Pty Ltd |
Chocolates, candy and brittles |
Households |
Leading confectionary products manufacturer in Australia |
The Australian Sweet Co |
Candy and Brittles |
Households and corporates |
major confectionary product supplier within Australia |
Indirect Competitor |
Product |
Target Market |
Market Positioning |
Just Pasta |
Fresh pasta, sauces, and snacks |
Households and populations across all demographics |
Leading pasta manufacturer in Australia |
7 Chefs |
Sauces, snacks and fresh pasta and fresh meals |
Households and populations across all demographics in Australia |
A major baked food and pasta producer in Australia |
BarreirosPorto & Darocha (2015) defined marketing macro environment as uncontrollable and external factors that influence an organization’s decision-making process and subsequently impacts on its strategies and performance. Herein, there will be an evaluation of the new confectionary’s potential technological factors that can be considered to promote the general operational efficiency of the business or equally create a competitive edge.
As a new confectionary business, there is a need to try the use of best available technology in Australia. According to Tandon & Sethi (2017), the confectionary can adopt an array of technological equipment such as customized accounting/financial management system, a computer system, a cashier system, as well as production equipment that will enable an efficient and smooth production process. In doing so, the confectionary can contact companies such as the Australian Confectionary Equipment Supplies for equipment such as spiral cooling towers, dough mixers and confectionary oven (Fulgoni 2018). Other companies such as the Xero Australia and NetSuite Australia can also be contacted for accounting and cash management systems.
Upon analysing the new confectionary’s potential macro and microenvironments together with the consumer behaviour, there are several key environmental factors that emerge as mandatory for consideration. For instance, it is important to establish a good solid waste management strategy that will ensure that the confectionary’s waste management comply with the available environmental control regulations (Chaidhry & Agarwal 2015).
Marketing strategy can be defined as the activity of developing a plan that outlines the specific activities to be carried out over a specific period time to meet sales and marketing goals and objectives (Kromuang et al 2017). This section of the report will identify the new confectionary’s target market in terms of segments and the various characteristics of the segments. The section will also highlight the recommended market positioning of Donald’s confectionary as well as the ideas that will promote its competitive advantage.
Morgan et al (2018) argue that the identification of the target market for every start-up is an important step in ensuring that the firm develops suitable products and services for its customers as well as ensuring that the necessary strategies are put in place to satisfy the customers. Hence, the following table (Table 2) summarises the possible target market segment for Donald’s confectionary. It is important to note that the psychographics can be obtained through interviewing the existing clients or through an investment in web analytics. All in all, the first segment can be family or friend gatherings, the second segment can be professionals working around each outlet while the third segment can be children and young people
Microenvironment
Table 2: Market Segments for Baked Goods
Characteristics |
Adults |
family and friend gatherings |
Children and Young People |
Geographic |
Each outlet can target adults working in companies and businesses within the nearby streets and premises |
Each shop can target the family and friend gatherings within their geographic areas as well as any social event that happens near the outlet. |
Donald’s confectionary can target children parties and related social events within the outlet area |
Psychographic |
The firm can also target adults who like healthy lifestyle but may not have adequate time to dig much into the product characteristics. The confectionary will also target adults who have allergies and dietary needs. |
There can also be a target to family and friends who often go out to have fun |
Young people who enjoy time with small groups of friends can also be targeted. In fact, each outlet can be fitted with internet accessibility to allow small working groups of young people to work while having chocolates and candy |
Demographic |
There can be a target of both male and female adults who prefer confectionary products after breakfast, lunch and dinner – any time while at work. |
There can be a target of both young and old families; as well as young and old friends |
Both male and female teenagers can be targeted |
Behavioural |
There can be a target of adults who prefer chocolates during business events and meetings |
Families and friends who prefer quality over economy can be targeted |
Children and young people with behaviour of carrying candy to school can be of much target. |
McCollough & Shook (2017) mention that evaluating market segments involves three factors that must be considered, including the segment’s structural factors, the segment’s growth and size, and the organization’s resources and objectives. According to the author, evaluating the organizations’ growth and size means identifying the current growth rates and size of a market segment and comparing their ability to resonate or align with the organization’s current objectives. Next, Fulgoni (2018) writes that evaluating the market segments includes also an examination of each segment’s market structure and determining whether they can affect the segment’s long-term attractiveness. For instance, a segment that already contains more aggressive competitors is considered less attractive. Lastly, evaluating the market segments also entail the identification of the segments’ ability to sustain the organization’s resources and to facilitate the achievement of organizational goals (Vlasic et al 2017). By considering these factors, children and young adults appear to be the most recommendable market segment for Baxter Bakeries because it will not cost much to target, and because of its high growth potentiality.
Market positioning strategies are usually based on the market positioning theory. According to Morgan et al (2018), this theory explains the place occupied by a brand within the market and how the brand is distinguished from other competitor brands. Thus, the practice of market positioning for Donald’s Confectionary means defining a strategy for the confectionary to distinguish itself from its competitors. In this regard, the confectionary can position itself as a brand with a differentiated range of chocolate and candy products prepared to offer quality, safe and enjoyable taste.
Defined in a simple manner, competitive advantage refers to the characteristics or attributes of a business, its products, and services that make it better than other market players (Zheng 2017). Hence, Donald’s Confectionary competitive advantage would be the characteristics of its products and services that make it look superior and better than other confectionary producers within Australia. In an attempt to gain a superior competitive advantage, Donald’s Confectionary can endeavour to situate its outlets in strategic places where its main target market segment (children and young adults) are likely to easily gain access. It means situating the in social places within the cities and townships it chooses to have outlets in. Similarly, besides keeping a secret high-quality recipe, the confectionary can maintain more affordable prices for its products to attract more customers
McCollough & Shook (2017) define marketing mix as the practice of executing a successful marketing plan by identifying the right product or services (or a combination of both) for the right market. It means integrating the marketing elements of place, product, price, and distribution in a manner that yields the best outcome out of the marketing strategy (Vlasic et al 2017). This section will evaluate and propose the best pricing, distribution and product strategy for Donald’s confectionary.
This strategy should consider the core products as well as the augmented products to deliver the best value to the customers. According to Fulgoni (2018), a major strategy to be considered by the confectionary is to provide unique and quality products for its customers. Thus product differentiating should be a strategy to consider. In summary, because the confectionary targets friends and family gatherings, adults, children and teenagers, the following strategies should be considered:
Suppliers
First, the confectionary should consider encouraging families to spend on full package products which may include full chocolate packages at normal price, and two augmented free two pots of cocoa beans. This package is also recommended for children friend gatherings who may want to enjoy together. According to Morgan et al (2018), offering different packages of products for different sets of customers (product differentiation) is an effective tool of showing that the business understands the customer’s unique needs and a demonstration of its ability to satisfy those needs.
The confectionary can also have a student package that targets children and the youth. The package can be in the form of a lower priced product in a bid to generate customer loyalty among them. According to Fulgoni (2018), it is expected that this lower price serving will not only build customer loyalty but also cultivate the spread of good word of mouth from the young customers.
As a new confectionary business, it is recommendable that Donald adopts competition-based pricing as its pricing strategy. According to McCollough & Shook (2017), this pricing strategy is developed by analysing the competitors’ pricing strategies and setting the prices within that pricing rage. For instance, if Acb Suncity Pty Ltd charges $80-$100 for a full package chocolate and $10-$40 per chocolate wafer, then to gain a successful market entry, Donald’s confectionary should charge $80-$90 for a full package chocolate and $10-$30 chocolate wafer. In this regard, Efanny et al (2018) note that using the competitor’s pricing as a basis for establishing a new entrant’s pricing eliminated prohibitive pricing while maintaining good profit margins.
Morgan et al (2018) discourage start-up entrepreneurs from the franchise system because it may require more resources and legal requirements to establish. Hence, the most appropriate start-up form for Donald’s confectionary high end speciality stores because it will allow him to grow the brand independently rather than depending on outlets such as (Aldi Morgan et al 2018). Meanwhile, as mentioned earlier in this report, the outlets should be strategically situated in social places to target its mainly targeted market segment which is children and young youth gatherings (Zheng 2017). All in all, other distribution strategies for Donald’s Confectionary include:
Walk-in customers: the confectionary should employ waiters to serve customers who walk into the confectionary to buy products. To essentially eliminate long waiting line during service, according to Fulgoni (2018), the confectionary should ensure that each customer is served within 15 minutes ones they are within the confectionary shop.
Online services: the confectionary can also establish an online delivery system where customers can select the products on the confectionary’s website and pay for orders with credit cards. However, there should be a free delivery minimum expense of $ 100, meaning that customers who order products less that amount are not eligible for free delivery (Vlasic et al 2017). Similarly, the confectionary can have a phone call delivery service, where customers can make orders through phone calls and have their products delivered.
The following table gives a summary of recommendations that would ensure that Baxter Confectionary rolls out an effective marketing plan that helps achieve its objectives:
Publics
Table 3: Summary of Recommendations
Strategy |
Recommendations |
Target market |
The confectionary’s target market would be family and friend gathering, young children and the youth., as well as adults from around its outlets |
Value proposition |
A brand with differentiated range of confectionary products prepared to offer quality, safe and enjoyable taste. |
Competitive advantage |
Situate its outlets in strategic places where its main target market segment can easily access, keeping secret a high quality recipe, and maintain more affordable prices |
Core product strategy |
Encouraging families, children and friend gatherings to spend on full package products through product augmentation and have a low priced student package that targets children and the youth |
Actual product |
Full package and pieced chocolates, candy nuts, drinking chocolate plus other confectionaries. |
Augmented product |
Two free pots of cocoa beans for each full package chocolate |
Pricing |
Competition-based pricing |
Distribution |
Walk in customers, Online services |
Conclusion
For purposes of continual progress, there is a need for Donald’s Confectionary to establish monitoring techniques meant to identify elements of this marketing plan that may be unsuccessful. For instance, to measure customer satisfaction, there will be a need for periodic customer survey or an automatic customer rating system (Zheng 2017). This will ensure that the confectionary delivers satisfying services to its customers and that the process is always on constant improvement. Similarly, there will be a need for periodic financial analysis to measure the financial implications of the recommended marketing strategies and whether they have a good business case.
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