Chocolate Industry Marketing Strategies

This assignment delves into the various marketing strategies employed within the chocolate industry. It explores concepts such as branding, product design, consumer perceptions of sugar content, pricing strategies (including markdown vs. everyday low price), ethical considerations like fair trade, and positioning against large competitors. The analysis draws upon academic literature and real-world examples to understand how companies navigate these complexities.

Running Head: Strategic management
Strategic Management

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Executive Summary
The main aim of the report is to give focus on the strategies that can assist Godiva to
outperform with the competitors. This report takes into consideration Pestle analysis and Porter 5
Force model. In the last phase of the report value chain and generic porter, strategies are
discussed. There are many issues that are identified in the report and also the strategies are used
for market expansion of the products and services.
Table of Contents

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Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................3
Macro Analysis............................................................................................................................................3
PESTEL.....................................................................................................................................................3
Political factors....................................................................................................................................3
Economic Factors.................................................................................................................................4
Social Factors.......................................................................................................................................4
Technological Factors..........................................................................................................................5
Legal factors........................................................................................................................................5
Environmental factors.........................................................................................................................5
Competitors Analysis...................................................................................................................................6
Porter 5 Force Model...............................................................................................................................6
a.) Threats of New Entrants..........................................................................................................6
b.) Threats of substitutes..............................................................................................................6
c.) Degree of Industry Rivalry...........................................................................................................7
d.) Bargaining power of Suppliers.................................................................................................7
e.) Bargaining power of the Buyers...............................................................................................7
Internal Analysis..........................................................................................................................................7
The Value chain of Godiva.......................................................................................................................8
Primary Activities.................................................................................................................................8
Secondary Activities.............................................................................................................................8
Porter's Generic Strategies..........................................................................................................................9
Cost leadership........................................................................................................................................9
Differentiation.........................................................................................................................................9
Focus.....................................................................................................................................................10
Strategic Directions...................................................................................................................................10
a.) Positioning strategies.................................................................................................................10
b.) Promotion strategies.................................................................................................................10
c.) Pricing strategies...........................................................................................................................11
Conclusion.................................................................................................................................................11
References.................................................................................................................................................11

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Introduction
Godiva is a chocolate brand that was founded in U.S.A in 1926. It is known as one of the
best manufacturers of the luxury chocolates. These chocolates are purchased to gift on special
occasions like Birthdays. The company produces seasonal chocolates with special packaging.
The packaging in which the product is offered to the consumers is attractive and also the
company gives emphasis on attracting customers towards the company. The chocolates that are
offered by the company are expensive and also it is available in the Malls. Godiva Chocolatier is
a brand that is owned by Campbell's company and also it contributes 6 percent of the total
revenue on expansion. There are various challenges that are faced by the company in the UK
market (Garrone, Pieters and Swinnen, 2016).
The challenges are related to the increasing level of competition and also threat to
substitute for products. The concern of the company is to promote an international image of a
product but as a luxury product. It gives emphasis to the production and decoration of the
chocolates by hand and also the attractive designs are taken into consideration by the company.
In this report, the main emphasis is given to the strategies that should be considered by
the company to enhance the growth and profitability in the UK market. In the first phase of the
report, the focus is given on the pestle and five force models that will identify the threats and
opportunities. The value chain analysis is also discussed by considering the Godiva Company. In
the last phase of the report, the emphasis is given on the porter's generic strategies and also the
strategic directions and methods are taken into consideration to survive in the competitive
environment.

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Macro Analysis
PESTEL
Political factors
Political factors play important role in conducting the day to day operations of the
business. To attain success in the industry of chocolates it is important to take into consideration
a political factor that enhances the smooth working pattern of the company. In U.K there are
many changes of the government takes place that gives direct impact on the operations of the
business. To hire the employees in the factory, there are many restrictions that are imposed and
it could give negative impact on employing the candidates for conducting the activities of the
organization. Godiva chocolatier should consider all the government regulations.
It consists of health and safety rules. Product labeling regulations should be followed in a
proper manner. The franchise operations should adhere to the registration and also with the
disclosure of information. The imposition of taxes is the next factor that will determine how the
Godiva Company manages the product in a proper manner (Garrone, Pieters and Swinnen,
2016).
Also, there are many taxes that are imposed, that analyze the management of payment
and investment. In 2010 value-added tax was imposed that has given rise in the prices of
chocolate and the increase in the price level has given decline in the sale of the chocolates. To

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consider the corporate strategy, it is important that the company should consider the political
differences (Afoakwa, 2016).
Economic Factors
It is one of the essential factors that give direct impact on the buying behavior of the
customers for the Godiva products. The economic decline globally has given effect on the
extension plans of the Godiva and also it does not give impact on the sales. Godiva attained
success by gaining 30 percent rise in the profits. The economic factor like per capita income,
inflation and unemployment give direct impact on the profitability and success of the
organization. This is considered as an important factor that gives direct effect on the customers
and also reduces the purchasing power. Sometimes the impact can also be due to the fluctuation
in the currency rate. The activities of the organization are directly affected by considering this
factor (Oliveira et al, 2016). Economic up and down can give effect on the demand for the
products that are offered by Godiva.
For example, the demand for chocolate products in U.K has enhanced. It can be seen that
at the time of recession the demand for the product increases and also the labor cost is taken into
consideration by the company.
Social Factors
The taste and needs of the consumers keep on changing day by day. Godiva gives focus
on enhancing the taste of consumers. The company offers a variety of chocolates that can be
used by every age group. The social factors give direct impact on the buying pattern of the
individual. It is also seen that in U.K there are many problems that are arising like obesity in
children and adults. The nutritionists give advice to many people to reduce the intake of
chocolates. It has given direct impact on the sale of the product in the market. The main aim of
the Godiva is to offer products all over the world by increasing the satisfaction level of the
consumers. If the chocolate enhances the satisfaction level of the consumers, then it is seen that
the costly chocolates can be sold easily in the market (Raynolds and Greenfield, 2015).
Technological Factors
Technological is considered as an essential factor that gives direct impact on the
productivity level of the company. If the company adopts an updated technology, then it can be
easy to attain the large market share. Technology has given enhancement in the activities of the

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company. Godiva takes into consideration updated technology that altered the packaging and
production in the past years. The company use pathogen systems and filing patents for heat-
resistant chocolates (Hestad,2016).
Legal factors
Godiva is one of the recognized brands in the market. There are many other substitutes in
the market but Godiva is strong to compete in the market. The confectionery products have an
uncertain future due to the hygiene issues. The company should be aware of all the legal
proceedings so that the activities can be conducted in a proper manner. In the UK market, the
legal proceedings are more as compared to another market. Godiva should also give focus on the
trademark so that it cannot be copied by other competitors in the market (Kivetz and Zheng,
2016).
Environmental factors
Environmental factors give impact on the activities of the company. Fossil fuels are used
in a huge amount and also it leads to enhancement in the costs. It is very important for every
organization to have a good environmental image in the market. So, Godiva should try to start
investing in the green technologies that are environment-friendly (Nagle, Hogan and Zale, 2016).
Competitors Analysis
Porter 5 Force Model
It is used to analyze the competition level and also the profitability of an industry. These forces
are related to the microenvironment analysis and also the ability to serve customers and to
enhance the profits. The five forces are discussed below:
Threat of New Entrants High
Threat of Substitutes Moderate
Degree of Industry Rivalry High
Bargaining Power of Suppliers Low
Bargaining power of Buyers High

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a.) Threats of New Entrants
As it is seen that the industry has high profits, many new entrants will try to enter the market.
The new entrance will give negative impact on the entire profits of the industry. So it is
compulsory to block the new entry in the market. There are many threats that are related to the
new entrance in the market. The threat of the new entrants is high, as it is analyzed that it is easy
to enter this market. The legal formalities are less as compared to other businesses. The budget
that is required to set up the new business is also less in this industry. With the low capital, the
company can easily establish the business. A new entry in the market can give negative impact
on the sale of the products (Cho, Huh and Faber, 2014). It is seen that in U.K there are number of
large firms like mars that are dominating the market. So, the barriers to entry in the chocolate
industry are high. There are many competitors like LINDT chocolate and also Ferrero
Rocher chocolates.
b.) Threats of substitutes
The propensity of the buyer to substitute is moderate. There are many substitutes available to the
consumers. There are many popular chocolates available in the market and many companies
offer product at a cheaper price to attract more customers towards the company. Chocolates are
easy to preserve, so the rate of substitution is high. It is very easy for the consumers to substitute
the products of Godiva, as the price of the products is high as compared to other companies. In
the UK market, the luxury dark chocolates have entered the market by considering healthy eating
and anti-oxidant benefits of the dark chocolates (Markey, Lovegrove and Methven, 2015).
c.) Degree of Industry Rivalry
Many businesses are competing against Godiva and planning to give tough competition to
the company. The main rivals of the company are Hershey's, Ferrero. The rivalry will be
considered strong among these companies because the products that are sold are similar in
nature. If the level of competition is high, then it is evaluated that it leads to negative impact on
the company's position. Other competitors take into consideration, an effective competitive
strategy so that the success can be attained in an effective manner. The strategies that are adopted
are advertising, discounts (Goldman, 2013). The competition level in the industry is high as
there are many competitors who offer same type of luxury chocolates. Lindt and Ferrero
rocher is one of the luxury products and the market share of the company is also large. So
the main competition is from the company like Lindt and Ferrero Rocher.

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d.) Bargaining power of Suppliers
Godiva has high bargaining power than its suppliers, as there are many options that are
available to the customers. Godiva can easily buy the raw material at fewer prices and also more
in bulk as compared to other competitors (Mai, 2014).
e.) Bargaining power of the Buyers
It deals with the capacity of the customers to reduce the prices of the products. It gives
importance to the customers and also to the cost if the consumers give preference to another
product. The power of buyer is high when there are many options available and it is low when
there are fewer options available (Uggla, 2017). In this the buyer price sensitivity is also taken
into consideration and also the competitive advantage is given to the company's products. In UK
there are many competitors in the market, so the power of the buyer is high as the consumers can
easily substitute the products with other product. For example: If Godiva chocolates are not
available in the market, then the consumer can easily substitute with the other chocolates (Shen,
Fishbach and Hsee, 2014).
Internal Analysis
Value chain analysis

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The value chain is the process through which the company adds value and it consists of
production, marketing, and after-sales service. It is one of the important internal analysis tools
that should be considered by Godiva.
The Value chain of Godiva
Primary Activities
a.) Inbound logistics: In this, the focus is given to the inbound logistics in which the
company outsources the activities. The operations of the business are conducted by
taking into consideration sustainable and recyclable materials. At the time of packaging,
the company should take into consideration recyclable materials (Park, Ungson and
Cosgrove, 2015).
b.) Operations: Godiva gives focus on maintaining the quality standards so that the
customers are attracted towards the company. When the quality services are given to the
customers, then the organization can easily attain success (Dai and Fishbach, 2013).
c.) Outbound logistics: Godiva takes into consideration fast and timely logistic system so
that the customers can easily get the product offered by the consumers. The company
manufactures the products by evaluating the key markets. In the UK market, it is
important that the product should be available on every shop not only on the outlets so
that the sales can be enhanced in a proper manner (Beressey, De Boeck and Rozzi,
Godiva Chocolatier, 2015).
d.) Marketing and Sales: The Company should give focus on marketing the products by
advertising, Magazines. The company tries to attract a huge customer base so that the
activities can be conducted in a smooth manner. To increase the sales the company
should offer the product through the online services. By considering the U.K market it is
essential that the company should give focus on promoting the product in the market so
that the profitability can be increased. Like: by introducing attractive taglines, so that the
attention of the consumer can be grabbed easily (Parahoo and Mahate, 2016). For
example : If focus is given on Ferrero rocher then it can be seen that company take
into consideration proper marketing strategies to enhance the sale of the product in
the market.
e.) Service: To increase the customer service the company should give focus on attaining
proper information technology so that the product can be reached to the customers. The

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services should also be provided in a proper manner so that the satisfaction level can be
enhanced.
Secondary Activities
a.) Human resource management: Human resource is an important part of the organization.
Without human resource management, it will be difficult for the organization to conduct
the activities. Training should be taken into consideration by the company so that human
resources of the organization can be managed properly. The human resource of the
company should have proper knowledge about the products so that they can satisfy the
consumer if any query arises regarding the products.
b.) Technology Development: Godiva should give emphasis to enhance the sales through e-
commerce. It is important for the company to consider the updated technology so that the
activities can be conducted smoothly. If the company does not adopt the latest
technology, then it is very difficult to survive in the competitive environment (Özer and
Zheng, 2015).
c.) Firm infrastructure: The Company should give focus on establishing more outlets so that
the products can be easily available to the consumers. Not only in Malls, but the company
should give focus on introducing the products in the open stores. In the U.K market, the
company should give focus on making the product available on the retail outlets, so that
the company can attain success.
Porter's Generic Strategies
Cost leadership
Due to the high competition level in the chocolate industry, it is important to implement a cost
leadership strategy. The cost leadership strategy will give emphasis to ensure that the products
that are offered by the company are cheaper than the competitor's products. In the UK market,
the level of competition is high, so it is important that Godiva should take into consideration
proper cost leadership strategy so that the operations can be conducted smoothly (Griffin, 2014).

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Differentiation
In this strategy, Godiva should introduce innovative packaging by considering the dimensions
that enhance the value to the buyers. The company differentiates itself through its products. The
company offers extensive lines of products such as truffles chocolate selection by having the
research and development abilities. Godiva should also offer exclusive product lines that cannot
be copied by the competitors like chocolate dipped ice creams. Differentiation gives an
advantage to the company. If the products that are offered by the company are different in nature,
then the profitability can be easily attained. The demand for the unique products increases as
compared to the substitute products (Garg and Lerner, 2013).
Focus
This strategy should be considered by the company, so that cost focus can give benefits to the
target segment in the UK market. The cost focus can give success and help the organization to
achieve the goals and objectives of the organization. Next is differentiation focus that Godiva
considers to differentiate the products in the target segment (Ramli, 2017).
Strategic Directions
To enhance the market, it is essential that the company should consider effective
marketing strategies so that the goals and objectives can be attained. The strategies that should be
taken into consideration by the company are:
a.) Positioning strategies
Godiva chocolates are sold in malls that receive the high-end consumers. To attract the interest
of the customers towards the product, the company should position Godiva brands on the internet
and on social platforms. The company will offer a modern platform for the consumers to avail
the product at any time. If the products of the company are easily available, then large market
share can be availed by the company. So, to attract the customers in the UK market it is
important to give focus on positioning (Paharia, Avery and Keinan, 2014).
b.) Promotion strategies
Godiva should give focus on promoting the products by considering proper promotion
strategies. Promotion of the products can be done by establishing attractive taglines that attract
customers towards the products. The company should also give focus on giving attractive

Strategic Management
advertisements so that the customers can get knowledge about the products. To promote the
product in the market, the company should offer discounts, so that the consumers can easily get
attracted towards the products. If in the UK market, Godiva does not consider effective
promotion strategies, then it can create difficulty for the organization to sustain in the
competitive environment.
c.) Pricing strategies
The company should introduce low price chocolates so that the consumers can easily purchase
the item by not giving any second thought. If the prices of the product are low, then it can be
comfortable for the customers and also more customers can be attracted by adopting pricing
strategy. As, there are many competitors in the UK market, so to expand in the market it is
important for the organization to introduce low price chocolates also. For expansion in the UK
market, the company should introduce chocolates at a low price, so that the customers get
attracted towards the products offered by Godiva (Marjanova ,Jovanov, Davcev and Boeva,
2016).
Introduced Sainsbury’s analyses
Godiva partners with Sainsbury launched masterpiece of chocolates. Sainsbury have 537
supermarkets and also many stores. Their target is price sensitive customer so that it can
lead cost leadership. The business strategy is to provide low cost products as compared to
the competitors. The company managed the strategy by introducing product in low price as
compared to the competitors in the market.
Conclusion
By evaluating the report, it is concluded that effective strategies should be taken into
consideration so that the company can easily accomplish goals and objectives in the UK market.
In this report, micro and competitive analysis are conducted to access the actual position of the
company.
In this report, the main emphasis is given to the key challenges faced by the Godiva. In the first
phase of the report, the focus is on the external environmental analysis to identify the
opportunities and threats. In this section, the Pestle and 5 forces model analysis is conducted. In

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the last phase of the report, the focus is on the competitive advantage by considering porter
generic strategies. In the strategic direction section, the methods are explained for expansion of
the company's products and services.
References
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Griffin, A., 2014. Shy Godiva: Digital Likeness and the Personal Data Protection and Breach
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