Develop Organisational Marketing Objectives

This report provides a comprehensive analysis of the marketing objectives of Cocoa Delights, a dark chocolate store in Melbourne, Australia. It includes an organisational review, situation analysis, legal and ethical requirements, and a SWOT analysis. The report also discusses the vision and aim of the organisation, as well as the meeting with the CEO. It concludes with a viability report and recommendations for marketing objectives.

DEVELOP ORGANISATIONAL MARKETING OBJECTIVES

Table of Contents
Table of Contents..............................................................................................................2
1.0 Task 1: Organisational Review....................................................................................4
1.1 Introduction...............................................................................................................4
1.2 Organisational Overview..........................................................................................5
1.3 Brief on the Meeting with the CEO of the Organisation...........................................5
1.4 Vision and Aim of the Organisation..........................................................................6
1.5 Situation Analysis (PEST)........................................................................................7
1.6 Legal and Ethical Requirements............................................................................10
1.7 SWOT Analysis......................................................................................................11
1.8 Evaluation of Effectiveness of Existing Marketing Strategies................................12
1.9 Conclusion..............................................................................................................13
2.0 Task 2: Viability Report..............................................................................................14
2.1 Introduction.............................................................................................................14
2.2 Cost Benefit Analysis (CBA)..................................................................................14
2.3 PEST Analysis........................................................................................................15
2.4 Risk Analysis..........................................................................................................17
2.5 Fit Analysis.............................................................................................................17
2.6 Impact Analysis......................................................................................................18
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2.7 Conclusion..............................................................................................................18
3.0 Task 3: Marketing Objectives....................................................................................19
3.1 Introduction.............................................................................................................19
3.2 Objective Description.............................................................................................19
3.3 Overall KPIs and Objectives (Long-term and Short-term).....................................20
3.4 Attainability.............................................................................................................20
3.5 Compatibility...........................................................................................................21
3.6 Consistency............................................................................................................21
3.7 Legalities................................................................................................................21
3.8. Risk Management Strategy...................................................................................22
3.9 Conclusion..............................................................................................................22
References.......................................................................................................................24
Appendices......................................................................................................................28
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1.0 Task 1: Organisational Review
1.1 Introduction
The conceptualisation of marketing objectives and implementation of the same may be
construed to be significantly success-critical factors for a business organisation (Ashley
and Tuten, T2015). This is because of the fact that the process of such
conceptualisation and implementation may take into considerations the number of
factors that are both internal and external to the (business Baltes, 2015). Well designed
marketing objectives may help the management to execute the operations in the most
sustainable manner (Banihashemi, Hosseini, Golizadeh and Sankaran, 2017). The
present piece of the report briefly delves into the analysis of the marketing objectives of
Cocoa Delights, a dark chocolate store in Melbourne, Australia, with reference to the
given case study scenario.
At the very beginning of the paper, the researcher provides a brief introduction to the
topic followed by a concise discussion on the corporate mission and vision of the
company. In the subsequent sections of the report, the organisation’s external
environment has been evaluated on the backdrop of PEST framework. In addition, the
legal and ethical requirements have also been assessed and finally, a SWOT analysis
has also been conducted in order to state the existing capabilities and threats potential
to the firm that may arise in the long run. Finally, the researcher wraps up the
discussion by way of providing a concluding note.
In terms of organisation overview, it may be stated that the Cocoa Delights (hereinafter
may be referred to as “Cocoa” or the business or the company or the firm, as the case
may be) is one of the most reputed chocolate manufacturers in the chocolate industry.
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The company was founded in 2000. Cocoa supplies smooth dark chocolates, hot
beverages, sweets and confectioneries. The primary target of the firm is to spread its
business in all the cities of Australia. In Australia, business opportunities for cocoa
delights are quite mesmerizing as the growth potential is large and the customer base is
substantial, that may be analysed in the subsequent sections of the report.
1.2 Organisational Overview
Cocoa is a chocolate manufacturing and distributing store based in Melbourne,
Australia. Presently it has 15 physical stores across the country. The company was
founded in the year 2000 and hence it may be stated that the firm has spent a
substantial amount of time operating in the industry. The company specialises in
manufacturing and distributing handmade dark chocolate products. Presently, the
company has been performing extremely well in the given market with substantial
market share. It is expected that within a few years, the brand will achieve the majority
of the handmade chocolate market shares in the country.
1.3 Brief on the Meeting with the CEO of the Organisation
The meeting with the CEO of the organisation has revealed that the growth prospect of
the firm has been strong and the management strongly believes that the brand will be
able to achieve a competitive advantage in the industry within few years through its
sustainable offering and unique value proposition. The meeting has also revealed that
the management of the firm is assuming the considerable risk from the point of view
growing emphasis put by the Government and other regulators on the compliance
related to the environmental laws and regulations. In addition, the CEO has also
asserted that their offering of handmade chocolates has been extremely popular in the
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territory on account of increasing health consciousness of the customers. Therefore, the
management expects a sharp rise in both the top-line and bottom-line of the business in
the next few years and thereby achieve sustainability in the operations.
1.4 Vision and Aim of the Organisation
Mission and Vision
The vision of the company is becoming the world-class business in Australia with a
larger range of quality chocolate products. In this context, it may be stated that a vision
statement portrays the future potential and objective position of the company and hence
it is very critical for the management of a business to devise its vision and mission
statement carefully (Blakeman, 2018). The vision of the Cocoa may reveal that the
emphasis is primarily on the quality and thereby increasing the customer base in a
sustainable approach.
Goals, Aims and Objectives
A brief insight into the given case study may depict that the company was conducting its
operations with pre-set goals and objectives for both the short and long-term. These
goals majorly revolve around the quality assurance, enhanced value offering, fairness in
the transactions, and stability in the relationship with the vendor and suppliers,
transparent corporate reporting and also the sustainable value creation for the society
as a whole. In short, the aims and objectives of the company may be restated herein
below:
 Sustainability and disruptive innovation
 Customer satisfaction through value offering
 Employee satisfaction through efficient workplace and motivation
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 Initiatives towards building brand equity and quality
 Customer engagement and
 Sustainable and environment friendly operations
1.5 Situation Analysis (PEST)
Political
The political environment of the country has been business friendly as the country is the
member of several internal trade related organisations such as OECD, WTO, UN and
G20 etc (Bloch and Bhattacharya, 2016). It is needless to mention that membership of
these international organisations has paved the way for expansion and growth of the
business environment within the country (Boyle, 2015). The cross border policies and
foreign affairs of the Australian Government have also been strong in the last few years
as may be witnessed from its close and steady relationship with the USA. However, the
international relations of the country have also been criticised many times primarily on
the ground if its deportation law (Furlan and Faggion, 2016). Such criticism has made
by the Government of New Zealand from time to time. In addition, it may also be stated
that the UN has also alleged Australia for being failed to protect human rights,
indigenous rights and the treatment towards the refugees (Cawsey and Rowley, 2016).
Cocoa Context – Cocoa has been enjoying the business friendly political environment
of the country since inception and is a small-sized firm, enjoying the benefit of lower tax
bracket as well. However, the Government has recently introduced new sets of rules
towards the environmental compliances that may demand strict compliance by the
corporate houses. Such stringent compliance framework may put the management of
the Cocoa in stress and hence require strategic positioning and careful vigilance.
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Economical
The Australian economy is primarily based on agriculture with the majority of the
population is involved in agro and allied services and activities (Karimi and Naghibi,
2015). Though the growth rate in GDP has been marginal, the economy is considered
to be steady in terms of its sustainable production and considerable investment towards
the land and property (Chan, Darko and Ameyaw, 2017). The corporate tax rate is 30%
with the option of a lower tax bracket for higher income groups as well. The country has
been well maintaining the balance of trade and payment in the international trade arena
and importing oil, electronics equipment and medical apparatus etc. On the other hand,
the country exports iron ore, gold, coal, natural gas etc (Hong, Shin, Kim, Seon, ho Um
and Song, 2015).
Cocoa Context – The growing economy has aggravated the growth prospect of the
organisation. It has been historically observed that agro-based economy generally
allows food product business to grow and Australia is also no exception to the same.
Social
Australian society is one of the most advanced societies across the globe because of its
multicultural and multiracial aspects. People from different cultural background and
different countries come every year in Australia and stay therein (Jiang, Ramkissoon
and Mavondo, 2016). Australian Government adopted a mass immigration policy after
the World War II which is one of the most politically debatable issues in the country
(Hong, Shin, Kim, Seon, ho Um and Song, 2015). The average life expectancy varies in
the range of 80 to 84 and the people are generally health conscious (Gholami,
Karimiankakolaki and Ghobeyshavi, 2016). It may also be noted that Australian society
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prefers outdoor sports largely and the people spend times playing or watching sports.
Australia is one of the best countries in the world in terms of sports and the sports
sector contributes a sizeable portion to the country’s GDP. The country has the number
of public and private universities where the number of students from different countries
come every year (Hong, Shin, Kim, Seon, ho Um and Song, 2015).
Cocoa Context – The fact that the people are health conscious may accelerate the
growth of Cocoa because of its unique offering that matches with the demand
landscape of the customers. In addition, the country is populated with young students
who generally prefer chocolates and related products. Therefore, it may be stated that
the company has been able to sustain and grow because of the appropriate customer
segment available throughout the country.
Technological
Australian people and corporate houses have been able to adopt technology steadily
and with the passage of time, the investment towards technology has been increasing
on a consistent basis. It has been observed that the purchase of newer sets of
technology has been estimated to be almost $65 billion for the year 2019 (Lee,
Kozlenkova and Palmatier, 2015). However, the universities and research centres may,
at times, suffer from funding crisis and Government provides financial support to the
almost half of the universities throughout the country for the purpose of research.
Besides, the corporate houses also contribute to such an R&D program of the
universities as part of their CSR activities (Hong, Shin, Kim, Seon, ho Um and Song,
2015).
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Cocoa Context – The firm has been using technology in their marketing operations, to
a great extent, in order to reach out to the target customers. Such usage involves online
promotion, application of ICT (information and communication technology) in its
operations and supply chain and also in the value offering process.
1.6 Legal and Ethical Requirements
Government of Australia has given emphasis on environmental issues. Weather and
climate change is one of the most critical environmental issues the country has been
facing nowadays (Kidd, Kemp, Kashima and Quinn, 2016). Global warming has become
a matter of concern for the Government and hence the regulations related to
environmental policies have now become stricter (Liu, Wang and Wilkinson, 2016).
Since the country may be considered to be one of the driest inhabited continents on the
globe, the water crisis is being dealt with utmost significance (Kumar, 2016). As a result,
the environment-friendly products have become buzzword presently and the
Government emphasises on the green initiatives undertaken by the Government (Hong,
Shin, Kim, Seon, ho Um and Song, 2015).
Cocoa Context – It may be noted that the stricter regulations have made the corporate
houses uneasy and cautious with respect to the compliance requirements and the same
applies for Cocoa as well. If the company is found doing something that harms the
environment, it will be heavily penalized. Since Cocoa consumes lots of electricity, as
part of their value offering, through bright and light-filled stores and outlets, the
customer experience is construed to be satisfying. However, the flipside to the story
may be considered to be the environmental impact of the same and related compliance
burden as well on the management of the company.
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1.7 SWOT Analysis
Strength
One of the primary strengths of the company is its high quality offering. The quality is
top-class that creates customer satisfaction to a great extent. Products can be
compared with European quality chocolates. It processes more than ten types of cocoa
beans from several countries. Products are completely Australia-made. The company
use eco-friendly products and produce enormous variety and choice in chocolates.
Weakness
The budget of the company, in terms of marketing and promotion, is very low, as
compared to the other competitors. Cocoa is considered as the youngest company in
the industry. So, experience level is lower than the competitors. Company's product
market is limited. Products are available only in some major shopping malls of suburban
areas and in cities like Melbourne, Sydney, and Adelaide.
Opportunity
Australian people like products completely made in Australia. They usually never
compromise with the quality of foods. People are very health-conscious. The company
use fine dry cacao to process cocoa beans. They use sugar, dairy products, and dry
fruits all from Australia. Company's main product is dark chocolate. There is no risk of
extra added sugar which causes obesity. Moreover people now like online shopping and
the Broadband rollout is also increasing in Australia. So, there is another opportunity to
reach more people.
Threat
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Strict laws regarding environment, rising interest rates, the continuous growth of
unemployment, recent fall of disposable income are the threats for the company. The
market is highly competitive as the competitors are trying to offer value through their
products that makes the competition more aggressive. Besides, as stated earlier, the
regulatory environment has become stricter and hence there are potential threats for
non-compliance related impacts.
1.8 Evaluation of Effectiveness of Existing Marketing Strategies
The given case scenario shows that the current activities and strategic decision making
of the management of Cocoa have been in line with their pre-set corporate objectives.
After going through the case study, it has been observed that the company is now
focusing on local suppliers to national suppliers. It has also been decided to choose
media to reach more people and also to save money. The company is focusing on
creating brand awareness than product promotion as the former will create a
sustainability position for the business in the market in the long-run. In addition, it is also
to be noted that the expected store growth and sales growth are planned to be achieved
by the company in a given time horizon. 45 per cent gross profit margins could be
reached against 63 per cent objectives set. Moreover, it has been construed that PR
marketing is better than expected. Brand awareness achieved is 58 per cent. Some of
the lessons learnt along with the critical success factors (CSFs) are listed below:
 New innovation and creative idea
 Advertising through media.
 Increase in the number of chocolate consumers
 Comparative failure in advertising through radio
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1.9 Conclusion
The discussion herein shows that the company has successfully designed its mission
and vision which has been aimed at to be achieved through sustainable operations. The
management has always been vigilant on the recent trends in the market and any
changes in the market dynamics have been captured in their strategic decision making
process.
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2.0 Task 2: Viability Report
2.1 Introduction
In the previous sections, the organisational review has been carried out that shows that
the Cocoa has been performing well in the given industry segment. The company is
well-known for its food quality and taste. It has 15 gourmet chain stores in Melbourne.
The long-term aim of the company is to open 100 stores in other cities in Australia. The
given sections of the report have been designed in such a manner so as to provide an
insight into the marketing opportunities identified in the previous segments and analysis
thereof. In short, the given assessment is performed in order to ascertain the probable
opportunities for Cocoa.
2.2 Cost Benefit Analysis (CBA)
The management of the company has certain options to expand its business. Cocoa
may opt for franchising in order to grow its network and market share in the chosen
segment. Alternatively, there is another option to the management of Cocoa to
collaborate with Haigh's, a market player in the industry.
In this context, it may also be noted that Cocoa is trying to expand its business all over
Australia. In order to do so, the management has planned for probable two opportunities
which are as follows:
 Franchising or
 Strategic alliance with Haigh's
If the franchise option is opted for, the same may help the company to reach its
objective of setting up 100 stores within a year or so. Besides, the franchising options
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may help the management to avoid the additional cost of recruiting store manager as
the franchise owner will do the same for the firm. As a result, the option will involve
fewer cost implications as compared to the strategic alliance where the Cocoa will have
to invest substantially in the management as well. Besides, the 100 store target may be
achieved in a time period of 5 to 7 years. However, the strategic alliance may provide
leverage to Cocoa in terms of promotion as the partner is having an existing market in
the country where the brand building campaign will be easier to implement and also the
promotional cost will be considerably lower. However, in this context, it may be
observed that the strategic partnership with Haigh's is that the product offering by
Haigh's is comparatively less in quality and value proposition than that of Cocoa.
Therefore, the partnership may have a critical impact on the overall brand positioning of
the business.
2.3 PEST Analysis
Political (including Legal)
The Australian government has recently passed new legislation that may be considered
to be more strict and stringent in terms of compliance requirements to the corporate
houses (Schandl et al, 2016). in this context, it may be stated that chocolate industry
has been alleged to be involved in environmental degradation to a certain extent by the
excessive use of water and cocoa and hence, it becomes the responsibility of the
management to carefully abide by the newly introduced regulatory measures in order to
avoid any non-compliance and resultant cost implications (McDONALD, 2016). In such
a scenario, the company's current challenge is to reduce wastages and thereby reduce
pollution and also to save energy. It is needless to mention that if the company is found
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involved in activities that may cause any harm to the environment through degradation
of the planet, the same may attract severe repercussions from the regulators (Mehra
and Coleman, 2016). In addition, it may also be noted that the operation of the company
consumes a lot of electricity. Therefore, the main focus here will be to reduce electrical
usage and also to keep the stores soothing for the customers.
Economical
The Australian economy is one of the most developed economies throughout the globe
with a large focus on agriculture (Pratono, 2016). Such agriculture based economy has
created a number of job opportunities for the people therein. However, the recent trend
shows that the technological development has made it a bit troublesome for the
corporate houses in Australia to adopt the same in the operations and unemployment
rate has increased to a certain extent (Richards, Thomas, Randle and Pettigrew, 2015).
In addition, it may also be observed that the interest rates are also rising and the
disposable income of people is reducing. Though it is expected that the situation will
recover in long-term but increasing unemployment rate of almost 6% (presently) is
surely a matter of concern for the Government.
Social
Australian people are found to be considered health conscious as may be reflected from
the World Health Organisation's (WHO); the latest report also (Rudawska and Renko,
2018). The obesity has been a cause of concern for the people as they mostly rely on
fast and junk foods which may create lots of health issues in the long-run. As a result,
green food products have gradually gained their importance in the food segment
(Rutström and Harrison, 2017). In the similar line, Cocoa is also planning to introduce
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green products that may match with the changing demand and preference landscape of
the customers in the country and simultaneously may create sustainable value for the
customer base of the company.
Technological
Australian companies have rapidly adopted the technology and latest and trending
technology has been implemented in the operations of most of the big players in the
market (Sanclemente-Téllez, 2017). Small and mid-sized companies are suffering from
such implementation because of lack of expertise and financial resources. A majority
part of the corporate offering now has been trading online through e-commerce
(Venkatraman and Fahd, 2016).
2.4 Risk Analysis
If cocoa delight goes for a joint venture with Haigh's, there might be some legal risks.
The cross competition with a big brand also may be risky. The company has a lack of
management capacity. Moreover, branding cost of Haigh's store is also higher than that
of the company. As a result, Cocoa should keep these risk factors in mind while
proceeding towards the target.
2.5 Fit Analysis
If Cocoa may collaborate with Haigh's, the option would generate better opportunities
for Cocoa but a separate legal agreement is needed for each store. This will introduce
to greater legal issues. However, such an alliance is always welcome to move for
Cocoa especially in the background of insufficiency in store manager and therefore the
controlling loopholes as present in the franchising opportunities.
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2.6 Impact Analysis
If both the company Cocoa and Haigh's establish a business agreement together, then
a new large segment of the market can be targeted. It will hence be fruitful for Cocoa to
achieve greater market share in the industry in the long-run.
2.7 Conclusion
The discussion here shows that the Cocoa may evaluate the two marketing options
available to them in the backdrop of the established theoretical framework and with
reference to their individual cost and benefits. Both the options may seem to be feasible
to the management in the long-term. However, the strategic alliance may prove to be
more beneficial in the long run especially in the backdrop of an extremely competitive
market. It has been observed that such strategic alliance most of the time paves the
way towards excellence by strategising the offering, enhancing the value in the supply
chain and creating customer satisfaction through better delivery and service (VISHNU
and LAVANYA, 2019).
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3.0 Task 3: Marketing Objectives
3.1 Introduction
Strategic alliance or partnership is considered to be one of the crucial success-elements
for a business and the same may provide leverage to the firms involved in such alliance
in the market in the form of value proposition, brand building, sustainability and also the
scalability (Alon, Jaffe, Prange and Vianelli, 2016). In the previous sections, it has been
noted that Cocoa management has opted for such kind of alliance with Haigh's instead
of looking for franchising. However, such partnership may need to be evaluated once
against the backdrop of established and pre-set marketing objectives and also the
overall corporate mission and vision of the firm in order to assess its justifiability and
usefulness in the practical context, The present sections of the paper will delve into
such analysis and aim to substantiate the reasonableness of such an option in line with
the corporate objectives.
3.2 Objective Description
The objective set by the management of Cocoa is focussing on the strategic tie-up with
Haigh's, some of the KPIs and CSFs here in the context of costs and benefits
implications are listed as below:
For franchising
 Franchisee will bring capitals
 Stores provide easy marketing and sales.
 The target of opening a hundred stores can be achieved in 3 years.
For Joint Venture
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 It will help to reach a large target market.
 Haigh's marketing knowledge in 3capital cities will help to improve brand
awareness.
 Advertisement will be cheaper through Haigh's media.
 The target can be achieved in 5-7 years.
3.3 Overall KPIs and Objectives (Long-term and Short-term)
The aforesaid CSFs and KPIs may suggest that the company has effectively chalked
out both long-term and short-term objectives that may be achieved through planned and
controlled operations. Short-term objectives are compliance with the Government and
regulatory guidelines; customer satisfaction and focus on value offering; On the other
hand, long-term objectives will be brand awareness building and thereby achieving
sustainability in the industry segment. The subsequent sections of the paper will aim to
show the practicality and usefulness of these objectives against the theoretical
framework.
3.4 Attainability
The long-term objective is achievable. Presently, the market share of Cocoa in the given
segment is 18% which may go up to 45%, as the chocolate market is primarily occupied
by the handmade chocolate to the extent of 45%. However, the management of Cocoa
has set the target of an additional 15% that makes a total market share of 33%. Such an
additional 15% will help the Cocoa to attain the desired target. In other words, the target
is realistic an achievable.
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3.5 Compatibility
The objective is compatible and in line with the broader corporate objectives of
sustainability. The company intends to achieve 100 sore within the next few years which
is substantial from the present number of 22. However, the same is achievable if the
brand building initiatives take place on a consistent and effective manner.
3.6 Consistency
The long-term objective of achieving 100 stores across the country will be consistent
with the vision and mission of the company. Since the company’s vision statement
explicitly says the same, attainment 100 store will truly be the ultimate aim of the
company. However, the time frame set by the management for the given purpose may
not be met and the achievement may get a bit delayed as envisaged in the mission
statement of the company. Since partnership provides a sustainable and steady growth,
the same will not disrupt the market and the customer base will increase on a consistent
basis. Unlike franchising, rapid growth in sore may not be visible here.
3.7 Legalities
Alliance or partnership may involve certain legal considerations which should be
complied with by both the parties namely Cocos and Haigh's. In terms of legal
consequence, it may be stated that the management is well aware of the implications of
the non-compliance of the environmental regulations prevailing of the country. It is
expected that legalities should be abided by the parties and there should be no
deviations from the standards (Alreemy, Chang, Walters and Wills, 2016).
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3.8. Risk Management Strategy
The long-term objective of brand awareness building process involves certain risks.
First of all, financial risk is embedded within the propositions. Since the campaigning
involves substantial investment toward PR, advertisement and related activities.
However, the company management is hopeful in achieving a decent growth in store
growth and therefore, the management may be able to accumulate sufficient profit to
support such initiatives.
In terms of compliance requirements, it may be stated that the company may appoint a
compliance manager responsible for complying all the environmental and other related
regulations. For customer satisfaction, regular feedback collection mechanism will be
implemented which will help the management to assess the extent of satisfaction and
thereby mitigate any risk arising out of the same.
3.9 Conclusion
Based on the evaluation and argument put forward in the earlier parts of the paper, the
researcher here has reached to a concluding statement that may underscore the fact
that the identification of marketing opportunities in line with the corporate objectives are
critical to the success of the business. It has been observed that the companies may
need to devise the marketing objectives in such a manner so that the same is synced
with the broader vision of the business. Such consideration will entail the cost aspects,
revenue projections, strategic alliance, resourcing, compliance requirements,
competitions and also the promotional activities. The management should be
considerate on these elements while chalking out the marketing objectives. In the given
case study scenario, it has been established that the management of Cocoa has
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successfully reviewed the organisational positioning in the market, identified the
probable marketing opportunities and finalised the optimum one after due consideration
and analysis. The chosen one will focus on achieving the long-term aim of the business
in the most beneficial way. There will be challenges as envisaged by the higher
management of Cocoa as the market is competitive, regulations are stricter and
demand and consumer preference landscape is dynamic. Therefore, the management
may need to be vigilant on these points. Finally, it may be concluded that the well-
designed marketing objective sets supported by efficient leadership and management
through control, monitoring and follow-up will significantly contribute towards the
achievement of the corporate goal of sustainability in the market in the long-run in most
time and cost efficient manner (Alon, Jaffe, Prange and Vianelli, 2016).
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Page 27 of 30

Appendices
Case Study 1
Case study
You are the Marketing Manager for ‘Cocoa Delights’, a chain of 15 gourmet dark chocolate stores in
Melbourne, specialising in creating handmade dark chocolate products. The organisation is close to
reaching its set goals and looking to activate the next phase in its development. The CEO has asked
you to undertake an organisational review. To help you get started, the CEO has provided you with:
● the Cocoa Delights marketing plan (December 2017)
● an excerpt of the annual report by the Chair (December 2017)
● a subsequent interview
● the latest IBIS report for the industry.
You review the annual report and note the following statement by the Chair of the Board.
Within the next 5 years, Cocoa Delights will become a national retail brand that satisfies our
customers with a range of unique, high quality dark chocolate, as well as providing exceptional
customer service from our highly skilled and dedicated staff.
At the time of the annual report, the Chair of the Board was interviewed by a reporter who made the
recording available on their website. You watch and listen to the interview and hear the following
statements by the Chair of the Board.
Cocoa Delights has always been daring and unconventional. Creativity and innovation have always
been our strength and the cornerstone of our success. For our stakeholders, we have always been
about stewardship and adhering to professional and moral standards of conduct in all that we do.
For employees, we are committed to encouraging self-directed teams; we cultivate leadership and
maintain high levels of safety. Externally, we are committed to sustainable environmental practices
and offering meaningful value to our customers.
By 2022, I see Cocoa Delights as being a significant retail presence in every Australian capital city,
starting with 22 stores in the greater Melbourne area and growing to 100 stores Australia wide.
Our market strength isour ability to source the finest cocoa beans at prices that customers believe
represent value for them but also provide the organisation with the required margins and financial
returns.
During your interview with the CEO, you ask about the changes taking place in legislation that could
impact on Cocoa Delight’s operation. The CEO explains:
There is a big push by governments on the issue of sustainability. This focuses mostly on the
environmental issues of waste management and energy conservation. In the past, Cocoa Delights
stores have been deliberately designed to be bright and comfortable places to shop. This meant a
significant cost in electricity usage to run the lights and air-conditioners. With the new laws, we are
going to have to find ways to provide customers with what they want, without the high electricity
usage.
Another issue that the government is looking at is having the country of manufacture clearly stated
on imported products, although at present the government is allowing the industry to self-regulate
rather than pass laws. Cocoa Delights has always practiced this activity and is proud to be
Australian made. We see this as an opportunity to increase our market- share, as some of our
competitors are selling chocolate products that are imported from countries with a poor reputation
for quality and employment ethics.
You then ask about the new phase in the strategic plan, which the CEO describes as a big step:
We now need to change our focus from local suppliers of services to national ones, and to think
about opportunities to save money by gaining a wider geographic benefit and choosing media with a
national reach.
When asked about the current marketing plan against actual results for the year, the CEO reports:
We achieved our store growth and sales growth but our gross profit margins are currently sitting on
46%. I think we are still below the threshold for gourmet chocolate and hot drinks, which we predict
should be at an average gross profit of 63%. Expansion in sales and cost effectiveness are key
issues here. We have spent $60,000 on radio advertising and $280,000 overall, including PR,
magazines and direct marketing. While this radio advertising expenditure achieved sales results, it
was at a significant cost that was not initially planned for. PR has been particularly useful, resulting
in many write-ups on our unique offer.
The customer loyalty lists had achieved a total of 34,500 and a survey indicates that 58% of people
in the target market recognise the Cocoa Delights brand and what it represents.
Overall, our SWOT analysis in 2017 is still valid for today. Not much has changed in that regard.
Studying the latest IBIS report for the industry, you note the following differences between Cocoa
Delights’ marketing plan from 2017 and their current situation.
● Interest rates are in fact rising.
● Unemployment has also risen to 5.8%.
● The social trend towards people eating chocolate is growing stronger than anticipated.
● Broadband rollout has been delayed, putting on hold some of the organisation’s internet
marketing plans.
Page 28 of 30

Case Study 2
Case study
The Chair of the Board outlined the organisation’s vision in the following statement:
‘By 2022 I see Cocoa Delights with a significant retail presence in every Australian capital city, starting with 22
stores in the greater Melbourne area and growing to 100 stores Australia wide’
To achieve this vision, the Board has been exploring various options, including:
● fund and run the expansion program as a wholly-owned operation
● to franchise
● to take up the option of a joint venture.
The CEO has approached you to examine the two options of either franchising or joint venture partner, and provide
a report on each. The CEO has provided you with a consultant’s report on the franchising option, and a proposal
from Haigh’s Chocolates on the joint venture option.
You have been asked to prepare a PEST analysis on the operating environment for both proposals, and then
examine issues of costs and benefits, risk, fit and potential impact of each of the proposals.
Using the IBIS industry analysis, you identify the following aspects of the operating environment.
According to the IBIS report, interest rates are rising in the short-term but expected to level out at sustainable
levels for the coming three years. Disposable income has reduced due to rising interest rates, however, this
shortfall is expected to be recovered in the long-term, with wage increases expected to outstrip inflation rates by
2%. Unemployment levels are also increasing and expected to climb steadily to 6% in the coming years.
The Government is currently passing legislation that requires businesses to monitor and reduce their waste and
energy use. Significant penalties are planned for businesses that don’t comply with the new directive.
Technological developments with the broadband rollout across Australia have been delayed, although the rollout is
continuing and will be completed in the next three years. Internet retailing options are expanding, and most ‘bricks
and mortar’ retailers are taking advantage of this new technology.
Cocoa Delights will try to capitalise on the social trend of consumers being more health conscious, by promoting
the health benefits of dark chocolates and offer the largest range of dark chocolate varieties and products.
You review the consultant’s report on the franchising option with the CEO and note the following:
● The franchising concept will result in fast growth and could achieve the 100 store target within three years.
Franchisees bring their own capital and they provide a ready solution to the store manager shortage.
● Introduction of greater legal issues, with each store operating on a separate legal agreement.
● Current store managers are encouraged to run the store ‘as if it were their own business’ but the lack of an
equivalent financial reward does not inspire many managers to put in the hours required. Franchising continues this
theme but achieves greater results due to the increased rewards for hard-working store managers.
● Potentially greater conflict between local-minded business owners and the interests of a national brand.
● Proven Melbourne stores provide easy marketing and acceptance of franchise sales.
● Significant government laws protect franchisees, increasing the need for strict compliance by the organisation.
● Expansion would start in Sydney and move to a new city once profitability is reached in Sydney.
You also review the proposal by Haigh’s Chocolates with the CEO and note the following:● Haigh’s Chocolates overview: Mid-sized operations of only a few stores per city. Haigh’s sell chocolates at mid-
ranged prices. No imported goods. Extensive advertising. Medium to high quality product. Currently has stores in
Melbourne, Sydney and Adelaide.
● View themselves as operating in different market segments within the same industry.● Haigh’s already understands the markets in the three established capital cities, and are looking to open a few
stores soon in Brisbane. They have the necessary contacts for essential services, council compliance and state
government compliance issues.
● There may be a conflict of interest between what is good for Haigh’s and what is good for Cocoa Delights.
● The rollout to 100 stores is expected to take 5–7 years.● Advertising would be cheaper, given that they already access media via extensive advertising for Haigh’s
Chocolates.● Joint brand advertising could be conducted because the market segments are complementary rather than
competitive.
● Customers could enjoy greater access to all of the product groups, including the cheaper range of chocolate.
● Association with a mass produced product and brand could impact negatively on Cocoa Delights’ premier
reputation for quality chocolate.
● Haigh’s Chocolates will help establish Cocoa Delights’ brand awareness with access to low-cost combined
media buys in other capital cities.
● Haigh’s Chocolates will share advertising space on billboard, advertising and PR articles.
● Concerns over Haigh’s Chocolate’s past advertising practices.
● Joint industry-wide promotions will allow Cocoa Delights to establish early traction in its goals for market share
in other capital cities.
Page 29 of 30

Case Study 3
Case study
The CEO has informed you that the Board have considered your analysis of the two expansion opportunities
(franchising or joint venture), along with their own assessment of a wholly-owned company expansion, and decided
to go ahead with the joint venture proposed by Haigh’s Chocolates.
The CEO has asked you to develop some marketing objectives for the expansion plan.
You arrange a meeting with the CEO and take along Cocoa Delights’ marketing plan from 2017 and the Haigh’s
proposal to help you determine the new marketing objectives.
You note the targets in the Cocoa Delights Marketing Plan for 2017 focus on building brand awareness amongst
customers. The CEO explains that this is a benchmark that Cocoa Delights would like to achieve in all markets in
which it operates. This is in keeping with the Chair of the Board’s statement, ‘By 2021, I see Cocoa Delights with a
significant presence in retail chocolate in every Australian capital city’.The CEO states that, in Melbourne, it was brand awareness that helped to secure the key objectives of market
penetration and share, and that this should continue to be the goal. Brand awareness will be achieved by the joint
venture TV advertising campaign, costing the company $1.1 million in each new market. This money has been set
aside in the budget, as has provisions for an increase in staff for the marketing department to help manage the
campaign. Priorities for the plan are to ensure that the branding exercise complies with the Competition and
Consumer Act 2017 , and that it is not associated with activities that are not in the community’s best interests.
Established markets will allocate 20% of the advertising budget for brand awareness rather than product
promotion.
Managing brand awareness is an overall company responsibility. All managers and executives will be charged with
the responsibility to display the brand prominently in stores, advertising, packaging, staff uniforms, vehicles and in
PR articles. The key to managing this target will be regular feedback from surveys and research conducted by
national consultants Holt & Burrows.
You also note that the sales analysis of existing Melbourne stores shows handmade chocolate at 45%, partly
handmade at 25%, machine made chocolate at 15%, together with the hot beverages at 15%. The CEO explains
that, initially, the hand made chocolate gains early traction with the market, followed by uptake in other categories.
For this reason, the CEO suggests that a target of 30% for machine made chocolate would indicate that the new
markets were on track to achieve the overall sales target.
Often a new customer’s first purchase is from the Dark Decadence range, and this provides an opportunity to sign
them up for a loyalty program. Therefore, the initial advertising budget will feature items from this category, and
also be the focus of the front entrance prominent display during the initial period.In terms of market share, the vision of the company is to dominate the markets in which Cocoa Delights operates.
The CEO explains that Cocoa Delights has approximately 18 % of the Melbourne gourmet chocolate market, and
they expect to replicate and increase this rate in the long-term for every capital city in which they operate. From a
position of dominance, the company is able to achieve its sales targets, as well as the gross margins required to
succeed.
A full marketing plan will be developed, with resources including access to Holt & Burrows and 5% of turnover
allocated to finance the budget to achieve this target. The company will need to ensure that it complies with the
competition rules set by the ACCC for the market dominant player. To achieve this share, it is very important that
stores achieve their break-even target of $3 million. It is estimated that new markets will need to achieve about
15% market share before break-even sales levels are secured.
Working closely in this area with the joint venture partner should open doors to established marketing channels that
will ensure the achievement of this target. Legal agreements with Haigh’s Chocolates, covering a Cocoa Delights
veto right, will ensure that all marketing is conducted in a clearly defined ethical and legislative compliant way. The
following notes are from your Haigh’s Chocolates proposal review:
● Haigh’s Chocolates overview: Mid-sized operations of only a few stores per city. Haigh’s sell chocolates at mid
ranged prices. No imported goods. Extensive advertising. Medium to high quality product. Currently has stores in
Melbourne, Sydney & Adelaide. Strong in the replacement segment rather than new and refurbished dwellings.
● view themselves as operating in different market segments within the same industry.
● Haigh’s already understands the markets in the three established capital cities, and are looking to open a few
stores soon in Brisbane. They have the necessary contacts for essential services and council/ state government
compliance issues.
● There may be a conflict of interest between what is good for Haigh’s and what is good for Cocoa Delights.
● The rollout to 100 stores is expected to take 5–7 years.● Advertising would be cheaper, given that they already access media via extensive advertising for Haigh’s
Chocolates.● Joint brand advertising could be conducted because the market segments are complimentary rather than
competitive.
● Customers could enjoy greater access to all of the product groups, including the cheaper range of chocolate.● Association with a mass producer could impact negatively on Cocoa Delights’ premier reputation for quality
chocolate.
● Haigh’s Chocolates will help establish Cocoa Delights’ brand awareness with access to low-cost combined
media buys in other capital cities.
● Haigh’s Chocolates will share advertising space on billboard, advertising and PR articles.
● Concerns over Haigh’s Chocolate’s past advertising practices.
● Joint industry-wide promotions will allow Cocoa Delights to establish early traction in its goals for market share
in other capital cities.
Page 30 of 30