Mainstream Chocolate Companies' Sustainability Efforts

The assignment provided delves into the world of sustainable chocolate production, analyzing the efforts of mainstream chocolate companies to pursue social and economic sustainability in cocoa sourcing. It draws on a range of sources, including papers on the Australian chocolate market, the impact of energy-efficient investments in Singapore, and Malaysia's outward foreign direct investment. The assignment aims to understand why these companies are adopting more sustainable practices, providing insights into the complexities of global trade and industry development.

Running Head: International Marketing
International Marketing

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Contents
Introduction.................................................................................................................................................2
Company Profile and Product Overview.....................................................................................................2
Industry Background...................................................................................................................................2
Segmentation and Target Market.................................................................................................................4
PESTEL of Singapore and Malaysia...........................................................................................................5
Recommendations for market entry.............................................................................................................8
Conclusion...................................................................................................................................................8
Reference...................................................................................................................................................10

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Introduction
The below mentioned task talks about the company and product background of Zokoko, it is an
Australian organization which is famous for providing rich and premium chocolates in the
market. Now the organization is aiming to expand their business in an international market. The
task analyses the Singapore and Malaysian market for Zokoko. More details about the task are
discussed below:
Company Profile and Product Overview
The company Zokoko was formed in the year 2008 as a chocolate producing and manufacturing
organization. The company is formerly based in New South Wales Australia. The café and the
factory of the company are based in Blue Mountains in EMU Heights. The company procedures
and sells unique chocolates in the market of Australia. The aim of this organization is produce
chocolates that reflect their origin (place where they belong to). The company is known for
providing premium artisan chocolate in the market. They have gained specialization in selling
single-origin dark chocolate. The feature that makes the company unique in the competitive
market is because Zokoko is the one between few companies present in Australia that makes
chocolates from ‘bean to bars’. The company belongs to the chocolate industry where they aim
to place themselves among organizations that provide real and pure chocolates to the target
audience present in the market (Heritage 2018).
Further, the company is a private enterprise that is emerging as a large scale organization by
expanding their business in different areas. The vision of the company is to provide rich and
authentic and tasty dark chocolates made from the bean to bear process. These products of the
company are served in numerous cafes present in Australia Coco Harvest, Ralph's Café,
Essential Ingredient Prahran, Wollongong Flowers, Wiffens etc. And it is surprise to know that
Zokoko was also awarded as Favourite Chocolate in The Sydney Morning Herald Good Food
Guide 2012. The company is running successfully in the market of Australia and is further
aiming to capture the international market base as well (Zokoko 2018).

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Industry Background
The domestic target market of the company Zokoko is the Australia chocolate industry, the
industry is facing the changes in the market due to change in customer preferences from last five
years (TechSci Research 2018). As, the industry specifically focuses on the choice and
preference of customers which gives an advantage to Zokoko to excel in the potential market.
There has been an increase in focus on the health and wellbeing of customers due to which
companies have started using less fat, sugar and packaged flavors in the chocolate. The products
have been diversified which gives a better option to the customers to choose according to their
preference (Barrientos 2011).
Source: (Statista 2018)
Production of healthy products has become a demand for the companies present in the industry
as the customers have started shifting their focus from heavy chocolates to healthy products like
yogurt. Also, there is a good thing to know that the consumer taste and preference has started
shifting towards premium products from the analysis of last 5 years. The revenue of the whole
chocolate industry has increased by 2.2% from 2013-18 which is $6 billion (IBIS World 2018).
Adding details in the domestic market of Australia, it is evaluated that is projected to grow at
CAGR of over 7% during 2018-2023. High demand of confectionery products and increasing the
international player are increasing the Australian market of chocolates (IBIS World 2018). The
company gives opportunity of employment to more than 11,225 people and it includes around

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341 businesses in the market. The company generated 301.07 billion dollar revenue in the year
2015 that stated prosperity in the future growth of the market. Further, the market share of
Zokoko is very small as the organization faces tough competition against Lindt, Caadbury,
Nestle etc. (IBIS World 2018).
Source: (TechSci Research 2018)
On analyzing the chocolate industry on global context it was evaluated that the market of Asia
are expected to have CAGR of 4.7% due to low penetration (TechSci Research 2018). However,
this product is consistently increasing its shares in other parts of the world. Mondelez, Hershey,
Nestle, SA Ferroro Group, Mars Inc., Kraft Co. are some of key leaders ruling the global
chocolate market. Further, there is presence of fewer barriers in this market but high competition.
Also it is assumed that the market will grow due to increasing interest of customers in this
industry.
Segmentation and Target Market
From the company view point: Different types of customers are targeted in the market based on
their demographics, psychographic, behavioral and geographic features. The company should
target 2 segments that are based on the age group, and taste and preference. On the basis of age,
three groups are targeted that are 05-15, 20-30, and 30-40. People under 05-15 age group
segment are those who are small children and like sweet taste of chocolates. These children
prefer milk chocolate white chocolate rather than dark chocolate. 20-30 age group people

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includes those people who like the rich and authentic taste of dark chocolates. They like different
flavors of dark chocolate as well. And lastly, 30-40 age group people are those who like eating
chocolate are not too sweet, are good in taste, and are good for health as well. Further, the
potential customers of the company are those who like the taste of chocolate and are loyal
customers of the company as well. These people have differential taste in chocolates but once a
person like a taste of a chocolate then they become loyal towards the company (Carmignani, and
White 2013).
From the industry view point: The customer segments present in the industry are initially based
on the tastes that are dark chocolate lovers or milk chocolate lovers. Then comes the people who
are loyal towards an organization or likes tasting different company’s products. The important
customers for the company Zokoko are the ones who like rich dark chocolates and are loyal
towards the company for the taste.
PESTEL of Singapore and Malaysia
Market analysis of Singapore (PESTEL): The market of Australia is strong and powerful as it
gives the advantage to the companies present in the industry to earn well. The people have
indulgence behavior that says that they spend more on their choices which provides advantage to
companies like Zokoko to attract the customers and initiate sales. Further below-mentioned are
the factors that influence demand of the company.
P: low degree of risk is present in the political factors of the country. The political and Economic
Risks Consultancy mentions that the country Singapore enjoys lowest political risk among the
whole continent. The democratic country has attained stability in their political system which
improves the business opportunities as well (Choy, Cheong, Laik, and Shung 2011).
E: The economy of the country is vibrant and free market economy. Also the economy of the has
received AAA rating. The employment rate of country has increased by 3% and it is also
expected that the GDP would expand by 2.7% in 2018. Trade is moderately important to
economy; combined value of exports and imports equals 40 percent of GDP (Austrade.Gov
2018).

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S: The tradition and values in this country are inherited from the eastern parts. But also the
younger generation of the country follows the western culture. The people of this country use
English as their main language. The business sector also expects high purchasing power from the
people of this country. These people are more indulgent than restraint (Deng, Li, and Quigley
2012).
T: People in this country have attained quality of life and a perfect lifestyle by using hi-
technology in their daily life routine. Communication and connectivity in the country has been
increased with the use of internet. Technology has also enabled a fine IT infrastructure in the
country.
E: There is lack of water in this country. Singapore is dependent on Malaysia to supply water to
them (Vu 2017). The ministries are working to reduce the air pollution in the country. Pollution
caused from transportation is the biggest reason for air pollution in the country.
L: According to the government, the electronic commerce grew because of the transparent and
favorable market legislations issued in the country. The industries in Singapore are developed
due to active regulations and policy initiatives taken by the government of the country. Also the
cross border transactions are government by the rules formed which gives ease to companies in
working international companies (Tsai 2012).
Porter Analysis of Singapore
Suppliers’ bargaining power: low
There are specifically four ingredients supplied in the industry that are aromas, colorants, sugar
and gelatin. There is presence of constant fluctuations in the price of sugar that automatically
affects the prices of the chocolate. Also, there are many sugar suppliers present in the industry
who can provide sugar to the chocolate companies at reasonable prices (Lee, and Fagan 2015).
Customers’ bargaining power: medium
There are two markets present in this industry, one is B2B and another is B2C. The customers
have low bargaining power in hand while in the case of B2B as the customer cannot negotiate for

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the price stated by the company, the companies have the advantage to buy product in lot that
reduces the price.
Threat of substitutes: high
Numerous associations introduce in the market give same kind of items at same costs also.
Further will the entry of non-sugar confections, an immense market portion is moving towards
these items all together decrease the utilization of items that builds corpulence.
Threat of new entrants: high
There is nearness of high level of dangers in this industry in the event of new entrants in the
market. As it is anything but difficult to get to crude materials which are required to make the
items which give a kick begin to the underlying business of chocolate making. Additionally there
is no strategy engaged with making this item and low exchanging cost (Ramli 2017).
Competition between established firms: high
There is high level of rivalry present in the chocolate business. There is nearness of high level of
substitutes too that expands the risk for the organizations. Adding to it, there is low item
separation because of which clients can rapidly move towards another associations giving same
kind of item. Chocolate Atelier, Aalst Chocolate Pte Ltd, Petra Foods Pte Ltd is some of the
domestic competitors present in Singapore.
Market analysis of Malaysia
P: The country is a multi-party democratic country. Malaysia has been working under the ruling
of Barisan National party from past 25 years. This party helped the country to attain stability and
good business investments as well. There is presence of corruption in the country which becomes
a barrier to foreign trade.
E: The main attraction for the business in this country is its vibrant economy. There is average
economic growth of 7% in last 10 years. Also he consumer incomes have been increased which
gives rise to retail and economic products manufacturer. International trade is working well in
the country and export margin is 37% (Hussin, M.Y.M., Muhammad, Abu, and Awang 2012).

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S: There is presence of 30% of Malay, 60% Chinese and 10% of Indian in the country. The
mixed population encourages rich culture in the country. Also, all people in this country lives
peacefully without harassing the image or culture of any other person. Islam religion is mainly
preached in this country (Ramayah, Samat, and Lo 2011).
T: The technology of the country is not advanced enough to compete with other organizations
present in the market. Multimedia and communication are the most focused sectors in the
country. Cyberjaya is a city present in the country that is self-contained intelligence city with
world class IT infrastructure.
E: High development cost is required to maintain the environment in good position. According to
the information given by UN, Malaysia’s deforestation rate is increasing at a higher rate than
other tropical countries. Factories have started building at the rainforest land which is depleting
the state of nature in this country.
L: The legal system of the country is based on the British common law, further as there
preachment of Islam in the country due to which Islamic law is also followed by the Muslim
people. There is harsh punishment for the rule breakers and death penalty and flogging are
widely used (Goh 2011).
Porter Analysis of Malaysia
Suppliers’ bargaining power: high
There is high bargaining power of supplier as they have the advantage to provide raw material to
company at prices decided by the. The suppliers of every chocolate manufacturing organization
are fixed and they go not switch as well due to which suppliers gain advantage (Vlaeminck, et.
al.,2016).
Customers’ bargaining power: low
There is low bargaining power in case of customer as they do not have the opportunity to ask for
their price from companies. These people show loyalty to company even if they hike prices.
Threat of substitutes: low

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There is high degree of substitution as not many organizations serve dark chocolate in the
market. The customer also shows their loyalty to organizations. But now companies are
diversifying their field (Squicciarini, and Swinnen 2016).
Threat of new entrants: high
There is high threat of entrants as already many organizations in Malaysia provide milk
chocolates that are now shifting towards providing dark chocolate in the market.
Competition between established firms: high
With changing taste of customers, the companies are now providing dark chocolates that are
increases the competition in the industry. Some of the main competitors in Malaysia are,
ROYCE' Chocolate - Bangsar Village, Harriston Boutique and Beryl's Chocolate Kingdom etc.
Recommendations for market entry
According to the above mentioned data analysis about both the countries, it should be noted that
Zokoko should enter in the market of Singapore in order to gain success and goodwill. The
market of Singapore is suitable for an international organization to work under as there is
presence of low degree of risk which will help the country to easily settle down in Singaporean
market. Further, people have high purchasing power in their hand which gives an advantage to
the company to provide their rich and quality products in the market. Also, literacy rate is high
which means the company will easily get adequate manpower to initiate their motive in this
country. Lastly, it should be noted that people have attained quality of life in Singapore which
means they prefer buying premium products in the market. Thus, the market of Singapore is
suitable for Zokoko to enter (Vu 2017).
The entry mode through which the company should enter is joint venture as it helps one
organization to attain goodwill and customer segment of other prevailing organization to succeed
in the market. Zokoko should find a Singaporean based organization which has earned similar
reputation as the company in their respective market and form an alliance with them in order to
work. This will provide Zokoko goodwill and resources of that organization which will help
them to grow.

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Conclusion
Thus, in the limelight of above mentioned events it should be noted that Singapore is the best
market for the company Zokoko to enter. Zokoko serves premium brand chocolates which the
customer and Singapore has good market of chocolates which provide an advantage for the
company to enter and earn profit. The above mentioned task talks about the industry and
adequate market analysis for the company.

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Reference
Austrade.Gov, 2018. Australia’s export performance in FY2017 [online]. Available at <
https://www.austrade.gov.au/News/Economic-analysis/australias-export-performance-in-
fy2017> Accessed on 20 April 2018.
Barrientos, S., 2011. Beyond fair trade: Why are mainstream chocolate companies pursuing
social and economic sustainability in cocoa sourcing. In Paper to ILO/IFC Better Work
Conference.
Carmignani, F., and White, G., 2013. FactCheck: how strong is Australia’s economy? [online].
Available at < https://theconversation.com/factcheck-how-strong-is-australias-economy-16716>
Accessed on 20 April 2018.
Choy, M., Cheong, M.L., Laik, M.N. and Shung, K.P., 2011. A sentiment analysis of Singapore
Presidential Election 2011 using Twitter data with census correction. arXiv preprint
arXiv:1108.5520.
Deng, Y., Li, Z. and Quigley, J.M., 2012. Economic returns to energy-efficient investments in
the housing market: evidence from Singapore. Regional Science and Urban Economics, 42(3),
pp.506-515.
Goh, S.K., 2011. Malaysia's outward FDI: The effects of market size and government
policy. Journal of Policy Modeling, 33(3), pp.497-510.
Heritage, 2018. Australia [online]. Available at <
https://www.heritage.org/index/country/australia> Accessed on 20 April 2018.
Hussin, M.Y.M., Muhammad, F., Abu, M.F. and Awang, S.A., 2012. Macroeconomic variables
and Malaysian Islamic stock market: a time series analysis. Journal of Business Studies
Quarterly, 3(4), p.1.
IBIS World., 2018. Chocolate and Confectionery Manufacturing - Australia Market Research
Report [online]. Available at https://www.ibisworld.com.au/industry-trends/market-research-

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reports/manufacturing/food-product/chocolate-confectionery-manufacturing.html. Accessed on
26 March 2018
Lee, S.M. and Fagan, J.M., 2015. Bitter Truth Behind Sweet Chocolate.
Ramayah, T., Samat, N. and Lo, M.C., 2011. Market orientation, service quality and
organizational performance in service organizations in Malaysia. Asia-Pacific Journal of
Business Administration, 3(1), pp.8-27.
Ramli, N.S., 2017. A review of marketing strategies from the European chocolate
industry. Journal of Global Entrepreneurship Research, 7(1), p.10.
Squicciarini, M.P. and Swinnen, J. eds., 2016. The economics of chocolate. Oxford University
Press.
Statista., 2018. Retail sales value of selected chocolate in Australia in 2015, by category (in
million Australian dollars) [online]. Available at <
https://www.statista.com/statistics/716628/chocolate-retail-sales-australia/> Accessed on 20
April 2018.
TechSci Research., 2018. Australian Chocolate Market [online]. Available at <
https://www.techsciresearch.com/report/australia-chocolate-market/1711.html> Accessed on 26
March 2018
Tsai, S.P., 2012. Place attachment and tourism marketing: Investigating international tourists in
Singapore. International Journal of Tourism Research, 14(2), pp.139-152.
Vlaeminck, P., Vandoren, J., Vranken, L., Squicciarini, M. and Swinnen, J., 2016. Consumers’
willingness to pay for fair trade chocolate. The Economics of Chocolate, 180.
Vu, K.M., 2017. Embracing globalization to promote industrialization: Insights from the
development of Singapore's petrochemicals industry. China Economic Review.
Zokoko., 2018. About Us [online]. Available at http://www.zokoko.com/australian-chocolate-
companies. Accessed on 26 March 2018.