International Marketing Strategy for Zokoko: Targeting Australia and Thailand Markets

This report proposes an international marketing strategy for Zokoko, an artisan chocolate manufacturing company, targeting Australia and Thailand markets. It includes market environment summary, competitor analysis, market readiness, mode of entry, STPD strategy, and distribution strategy.

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Table of Contents
Introduction.................................................................................................................................................2
Objectives....................................................................................................................................................2
Market Environment Summary...................................................................................................................3
Competitor Analysis....................................................................................................................................4
Market Readiness........................................................................................................................................5
Mode of Entry..............................................................................................................................................6
STPD Strategy..............................................................................................................................................6
Product Strategy..........................................................................................................................................9
Price Strategy..............................................................................................................................................9
Promotion Strategy...................................................................................................................................10
Distribution Strategy.................................................................................................................................10
Conclusion.................................................................................................................................................11
References.................................................................................................................................................13

Introduction
The international marketing refers to the application of marketing principles on the consumer
market in more than one country. The international marketing refers to different business
activities, which are designed to promote the goods or product at different places. It uses various
techniques such as pricing, product feature or promotional techniques, which can be used to
promote the product or the service (Doole & Lowe, 2008). There are several challenges of
promoting the product at a foreign place, such as competition, legal constraints, government
control and varied consumer behavior (Williams & Eber, 2012). It is important to understand the
unique features each country and the consumer market for developing an effective marketing
strategy. In this regard, in the present report, an international marketing strategy for Zokoko, an
artisan chocolate manufacturing company has been proposed. The company has created a
specific name for itself in the chocolate manufacturing industry, and has been awarded with
various awards such as First Place, Best Dark Chocolate, The Chicago Luxury Chocolate salon
in 2011. The company offers a wide range of products, namely, fine dark chocolate, Alto Beni,
Tranquilidad, Tokiala and Dominican Republic. It is a unique manufacturing organization, in
which the chocolate is made from scratch, such as sourcing, roasting and processing the means
and finally molding it into a final product.
Objectives
The objective of the present report is to provide a comprehensive analysis of the target market in
Australia and provide recommendations to expand in Thailand. The objectives of the present
report can be summarized as:
 To analyze the target market in Thailand

 To conduct a competitor analysis and market readiness in Thailand market
 To identify the appropriate mode of entry and appropriate marketing strategy for the
consumer market
Market Environment Summary
In 2017, the chocolate confectionary market witnessed slow growth rates. As a result, the
manufacturers continue their aggressive efforts in terms of product innovation to attract
consumers. There are various organizations, which are creating custom chocolates such as the
sugar-free chocolates, which is creating new trend towards healthy organization (Lascu, 2003).
The chocolate confectionary segment showed that the market for chocolate has jumped recently.
However, the chocolate market in Australia is fairly underdeveloped as there is low per capital
emission and consumption. Nestle is the most prominent international chocolate brand in the
country. The chocolate market is fairly undeveloped and per capital consumption is low. There
are several different categories of chocolate such as sweets, lollipops, jellies and mint, which can
are beneficial for the market. According to the market survey, about 78% of the Thai consumers
look for good taste in chocolate (Baack Harris & Baack, 2013). The survey further states that the
primacy concern for the customers is taste, which aligns with the results of several sweeter
brands such as M&M’s and Hershey. However, there is significant debate over what constituent
as good taste for the customers. The consumers across different countries have different
interpretation of the consumer taste. For instance, the consumers in Australia give weightage to
silkiness in texture whereas the consumers in Thailand give weightage to crunchiness in texture.
The chocolates filled with nuts and cookies, are well-received in Thailand (Nieburg & Young,
2016).
The acceptance of the functional confectionary is high across the region, with Japan having

access to the largest market for sugar confectionary. The consumers in Thailand are receptive
towards the change in confectionary and attracted towards healthy eating options (Mühlbacher,
Leihs & Dahringer, 2006). The medicated sweets have a significant share in the confectionary
market of the country.
Competitor Analysis
The rising income and increasing demand for the consumers have increased the
opportunities in South Asian countries, such as Thailand. Thailand has established a free trade
agreement with Australia, which makes it easy for the Australian companies to expand in
Thailand market. The Thai consumers are increasingly spending over food purchased through
different channels. There are a number of opportunities in the chocolate and confectionary
category, such as premium retailers are identifying handicrafts boutique products with limited
production (Doole & Lowe, 2008). In confectionary industry, the consumers prefer sweet candy
and there is growing preference for the additive free healthy candies in the Thai market. In the
recent years, there is growing opportunity for the cereal bars, which are appealing to the young
and wealthy Thais as a healthy breakfast option (Kleindl, 2006). While analyzing the
competitive landscape in Thai industry, it can be analyzed that Nestle Ltd is the strongest
organization in the retail industry with the retail value share of 22%. It has been identified that
the chocolate market in Thailand is quite underdeveloped with a very low per capita
consumption. The leading Thailand-based distributor DKSH has made partnership with Nestle
(Byrne, 2011). Other than that, there are several players in the Thai confectionary market such as
Ferraro, Wringley’s, ChupaChupa and Perfetti Van Melle.
There is high competition in the Thailnad’s confectionary market. Mondelez International is a
major confectionary organization in Thailand, which has various independent subsidiaries in

different foreign locations. Barry Callebaut, the biggest chocolate maker also had a
manufacturing facility in Thailand (Staronline, 2015). Mondelez International also has several
best-selling products in Thailand such as Halls Candy, Dentyne gum, Clorets, Ritz crackers,
Cadbury and Toblerone chocolate (Rungfapaisarn, 2018).
Market Readiness
The market readiness is a market research process through which the company analyzes that their
product is ready to be launched in a new market. It ensures that the product has all the features
and requirements of the new product. In this way, the organization will analyze if the product
solves the user needs and helps the user in increasing their efficiency. It can be analyzed the
market potential for the product is extremely high (Majaro, 2013). The confectionary and the
chocolate market in Thailand are fairly developed. However, the per capita consumption for the
chocolate is very low. Zokoko can exploit the potential for the chocolates in the market. The per
capita income in Thailand is expected to rise and it will be beneficial for the chocolate and the
confectionary industry of the country. Further, it can be perceived that the food and the beverage
sector is the fastest growing sector in the Thai economy. There has been a significant change in
the consumer habits of Thailand and the growing urban population has opened a large number of
opportunities in the consumer sector (Felzensztein Stringer, Benson-Rea & Freeman, 2014). In
the recent years, the crafted culture is also becoming popular in Thailand. The tropical climate of
Thailand is not popular for the production and consumption of chocolate. However, in the recent
years, there has been an increase in the production of the chocolate and the fruit is cropped in
Thailand as a significant source of income for the farmers (Max, 2018).

Mode of Entry
The market of Thailand has some unique characteristics; therefore, it is important to conduct
appropriate market research and identify the best strategy for the company. The main issues with
the Thai economy are the corruption and the lack of transparency in the government projects.
There are significant market opportunities for the company if it makes a strategic alliance with a
local distributor in Australia (Zhao & Priporas, 2017). It is an attractive method to reach the Thai
customers. Zokoko can partner with the potential customers and facilitate the market entry with
extensive market knowledge. According to the current analysis, the firms with the low market
share can be beneficial, when they are operating in the market niche. Therefore, it is advised that
the company applies focus strategy based on the differentiation strategy.
STPD Strategy
The segmentation, targeting and positioning strategy is the most common strategy in dividing a
market and employing appropriate marketing strategies (Skarmeas, Katsikeas, Spyropoulou &
Salehi-Sangari, 2008). It is the process of dividing the market in different strategic groups
according to the characteristics, behavior and the needs of the customers.
Segmentation: In the recent years, there have been several economic shocks in the Thai
economy, which has made the customers more sensitive to the price. The middle class in the
Thailand have a significant role in the total consumption and growth of various industrial sectors
such as finance, food and beverage. In the recent years, the food and the confectionary industry
is under a lot of pressure as the customers are becoming concerned about the health and food
quality. The customers are attracted towards the foreign products (Yang, Su & Fam, 2012). The
consumers are attracted towards better quality and taste. It has been identified that the Thai
consumers are attracted towards the sugar confectionery when they make foreign trips and visit

their friends and relatives. The target market for the present organization is children in the age
group 3-10 years of age and the teenagers up to 17 years. It also includes the consumers in the
middle-class with an average pocket size. The urban middle class is growing quickly in
Thailand; therefore, the company can also target premium customers and neglect the booming
sector of the middle class customers.
Targeting:
Defining the target market is important part of the marketing strategy of the organization. It is
important to understand, what the company is offering and the target customers of the
organization. In this regard, the target market for the present organization is developed as 3-10
years of age, teenagers to the age of 17 years and the urban middle class of the consumers. It
aims to become a part of the daily consumption of the users with an average pocket. The children
and the teenagers are part of the consumer segments and the organization has to avail the benefits
of exploiting this target customer base (O'Cass & Julian, 2003). There are only a few local
manufacturing companies in Thailand and they target low-income customers with a limited
spending capacity. It creates a huge potential market for the high quality premium products for
the international investors.
Positioning:
It can be stated that the positioning of the organization should be slightly lower than the premium
brands and little higher than the low cost brands. The company will position itself as a niche
market leader, which provides artisan chocolates to the luxury customers (Ailawadi, Lehmann, &
Neslin, 2001). The company aims to establish a unique image with a position of the pioneer in
Thailand and home to young population, with people being excited about new launches.

Distribution:
There are several distribution channels, which can be used to transfer the products from the
manufacturers to the end users. There are several alternative channels, which can be used to
transfer the consumer products from the production point to the retail stores. There are four
different types of distribution channels such as the direct delivery to the retail store, delivery to
the retail store through manufacturer’s distribution activity, distribution center, and wholesaler to
the retail shop, cash-and-carry to the retail shop, third-party distribution, and use of broker or
carrier (Munusamy & Wong, 2008). The selection of the distribution channel is dependent upon
the objectives of the distribution channel. There are several objectives of the distribution
channels, such as to make the product always available to the customers in the target market.
When the companies achieve this objective, they have to assure that the products are placed at
the right outlet through physical distribution channel (Helm & Gritsch, 2014). Another objective
is to support with different distribution factors such as quantity, means of transportation, product
handling, material flow and time.
The service satisfaction in another significant aspect of the distribution channel, which is used to
compare the level of service provided to the customers. With the high level of service, people
can impact their customer buying decision. The distribution channel can also be used to reduce
the cost of service and minimize logistics (Khan, 2014). The distribution channels can also be
used to receive accurate and fast feedback for the information flow. It can be used to gather
information related to the sales forecast, inventory management, damage claims, cost control and
level of service.

In the present, the company can take use of several different distribution channels for driving the
sales in the new market. Employing different distribution channel is also important for increasing
the visibility of the product, which is necessary for establishing the brand in the new market.
Zokoko will distribute the product in hypermarket and supermarket (Vermeir & Verbeke, 2006).
It will also distribute the product in different other platforms such as vending machine and small
retailers.
Product Strategy
The company has established a distinguished brand in the Australian market. Currently, the
company wants to enter the new market of Thailand. Therefore, it will use the adaptation
strategy so that it can enter the new market of Thailand. It will use the adaptation strategy for the
products, which are slightly different in flavor, color and images. The company will provide a
wide array of products such as chocolate, covered sweets, jelly and toffee.
Price Strategy
The company will use the differentiation based focus strategy to expand in the new market. It
means it will differentiate itself by offering artisan chocolates in different forms. It will also
impact the pricing strategy of the company. The products of the company will be advertised as
being imported from well-known company with unique features (Goi, 2011). It will promote the
company as a premium product producer; therefore, it can price the products similar to other
premium competitors in Thailand market. However, as it is a new market entrant, the company
can slightly lower its price in comparison to other customers. The company needs to lower the
price in comparison to the premium sector; however, it should keep the price higher than other

ordinary products (Moor, 2003). In order to implement a proper price decision, it is important to
look at the competitor’s pricing of their products.
Promotion Strategy
The artisan products have a niche place in the market. They are a sought after product; however,
the company can create a niche marketplace by adopting a few marketing strategies. Firstly, the
company can build its own website for the promotion of the novel product. In the present, the
competition is extremely high for the artisan chocolates. Several companies are entering into the
trade of artisan chocolate. However, an individual brand can easily get diluted in the
marketplace. The company will also use the strategy of regular experiment to succeed at the
marketplace (Ryans Griffith & Steven White, 2003). The company will promote the chocolate as
self-reward. The idea behind the campaign is that the chocolates are often given as a gift to
someone else rather it should be given as a given for yourself. It will take out the guilty factor
from the purchase. The innovation and new flavors can also drive the sales of the organization.
The company will also use the health benefits of the chocolates as a promotional medium
(Nezakati, Abu, Toh, C., & Abu, 2011). It will use the digital marketing tactics and platforms
such as Facebook, Twitter, and Pinterest. It will be used to connect with the consumers.
Advertisement videos will be used both on social media platforms and television to promote the
organization.
Distribution Strategy
The company will use different distribution channels to offer wide range of products. Attractive
packaging will be used to entice the customers towards the product. In addition to it, the
company will choose different point of sale for the product. The main distribution channel of

chocolate is hyper and supermarket for the sales. Regarding the chocolate bars, the customers
have a wide range of options; therefore, it is important to distinguish the product from the
competitors. Here, it is primordial for the brands to remain as much visible as possible (Helm &
Gritsch, 2014). Further, the brands should use catchy and recognizable colors for the packaging.
Vending machine is a strategic positioning for the brands to meet the consumer’s demand and
behavior. The consumers looking for the vending machine are looking for easily accessible
machines and they are willing to pay more for the services (Huang & Sarigöllü, 2014). The
company can also sell the chocolate bars at the gas stations, bakeries and cinemas.
Conclusion
It can be concluded from the present report that Zokoko, an artisan chocolate manufacturing
company should expand into foreign markets to increase its profitability. The company has
created a niche space for itself in the chocolate manufacturing industry as it produces artisan
chocolates. The company offers a wide range of products, namely, fine dark chocolate, Alto
Beni, Tranquilidad, Tokiala and Dominican Republic. It is a unique manufacturing organization,
in which the chocolate is made from scratch, such as sourcing, roasting and processing the means
and finally molding it into a final product. In the present, an international marketing strategy is
proposed so that the company can enter into the foreign market of Thailand. It is a tropical
country, with economy characterized by high level of corruption and lack of transparency. In the
present report, it is proposed the company should collaborate with local retailers as they have
adequate knowledge.

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