MKTG6002 Marketing: Market Environment Analysis of Donald B Chocolate

This case study analyzes the market environment for Donald B, a Melbourne-based chocolate maker planning national and international expansion. It examines buyer behavior, including product and brand choices, purchase timing, and dealer preferences, highlighting the importance of cultural, personal, and social factors. A SWOT analysis of Donald B reveals strengths like reputation and R&D, weaknesses such as seasonal sales and nutrition concerns, opportunities in globalization and low-calorie products, and threats from competition and price volatility. Porter’s Five Forces model assesses the competitive landscape, including the entry of competitors, threat of substitutes, bargaining power of buyers and suppliers, and rivalry among existing players. Key competitors like Mars, Nestle, Hershey’s, Mondelez and Lindt are profiled, detailing their offerings and target markets. Macro environmental factors, including political, demographic, natural, economic, technological, and cultural trends, are also analyzed for their impact on the chocolate market. The report concludes by emphasizing the need for Donald B to adapt to these external factors to minimize threats and capitalize on opportunities.

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Contents
Introduction...........................................................................................................................................2
The behaviour of buyers in relation to chocolate products....................................................................2
Micro environment................................................................................................................................3
Likely competitors, what they offer and who they seem to target..........................................................5
Macro environment...............................................................................................................................7
Conclusion.............................................................................................................................................8
References.............................................................................................................................................9

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Introduction
Donald B is a product maker of chocolates. The company is having two stores in Melbourne.
Now the company is planning to grow it’s business on national and international level. The
Company has to compete with rivals producing chocolate related products such as cocoa
products, drinking chocolate, marshmallow, liquorice, confectionary, glazed fruit and candied
popcorn. The company has considered various supermarket options for selling such as Aldi
options, Coles, Woolworths and speciality stores. In this report, a market environment
analysis is developed which describes micro environment and macro environment of
Melbourne. It is going to help in understanding possible impact of external local, national and
international factors on the business. These factors are outside control of business but these
cam be modified by taking advantage of opportunities presented. It can effectively minimize
potential threats.
The behaviour of buyers in relation to chocolate products
The behaviour of buyers in relation to chocolate products explores the process that drives
humans to make purchase decisions. There are various factors which affect behaviour of
buyers such as cultural, personal and social (Lancaster & Massingham, 2017). The personal
factor includes the income. The cultural difference comes under cultural factors. The social
factor includes the influence by others. The buyer behaviour includes:
Product choice: The consumers like to choose from the wide range of chocolate products
because it is the matter of taste and enjoyment. For instance, chocolate bars, chocolate
candies, cocoa products, liquorice, confectionary, glazed fruit, drinking chocolate,
marshmallow and candied popcorn.
Brand choice: Now a day’s people are more concerned with the brand as it provides the
quality satisfaction. Major brands available in Melbourne are, Cadbury, lindt and Ferrero
Rocher.
Purchase timing: People prefer to buy more in the festive season such as Christmas and
Easter and birthdays (Thaichon, Jebarajakirthy, Tatuu & Gajbhiyeb, 2018).
Purchase amount: It depends upon capacity and willingness of users that how much they like
to spend on enjoyment by such products.

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Dealer’s choice: The buyers like to buy chocolates from the reliable dealers to sure that they
get the right product on right time. The supermarkets are Melbourne’s favourite place to
purchase chocolate products such as Coles, Woolworths and more.
Micro environment
The micro environment of Melbourne can be defined by SWOT analysis. The SWOT
analysis can be defined under evaluating strength, weakness, opportunity and threat of the
company:
Strength
Reputation: The company has built reputation by providing the best and reliable products
such as cocoa products, drinking chocolate, marshmallow, liquorice, confectionary, glazed
fruit and candied popcorn. The reputation of company is strength for the company.
Research and development department: Donald B has research and development department
for the improvement of products and services. It conducts research for the expansion of
products.
Strong culture value: The company has strong cultural value due to it’s combined approach to
business and commitment to the stakeholders. The position of company is also supported by
the quality leadership, customer satisfaction and sustainability (Ingaldi & Škůrková, 2014).
Customer’s positive perception: The customers have positive perception about the products
of Donald B. The company has well established market with huge variety of products. The
trust and loyalty of customers highlight the capability of company.
Weakness
Lack of nutrition value: The company faced criticism due to lack of nutrition values. The
government initiatives for healthy eating reviewed various products of company to upkeep
mission of good food and good life (Scrinis, 2016).
International standards: The international standards demand a requirement of standardisation.
It has to be well-adjusted with the strategic need of company for the amendment of diverse
cultural environments.

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Sales tend to be seasonal: The sales are tending to be seasonal as the products are demanded
more in the festive season. Otherwise there are fewer sales of products.
Opportunities
Increasing acceptance of globalisation: There is opportunity for the company to sale it’s
products on national and international level which is actually aim of company. So the
company can grow on the international level (Parahoo & Mahate, 2016).
Low calorie products: The company provides low calorie products and the trend for such
products is increasing now a day’s. People are getting health conscious day by day and as a
result demand is increasing.
Innovative distribution channels: Donald B can sell products through various innovative
development channels. The company can sell products in supermarkets and on the online
platform like website and applications (Pickles, Barrientos & Knorringa, 2016).
Threats
Higher level of buyers: There is huge number of buyers in the Melbourne market. The
industry is filled by more choices and lower loyalty.
Inconsistency in the prices of material: The variation in prices of raw material influences the
ability of company to sustain prices (Neilson & McKenzie, 2016).
Availability of substitutes: The preference and ability of substitutes creates competition for
the company.
Porter’s five forces model
Entry of competitors:
The entry of competitors is problematic as there are already reputable companies in the
market like, Lindt, Cadbury, mars, nestle, Kraft, Ferrero and Hershey’s. These companies
rule the market with the unique type of chocolate products. It makes barrier for new
companies as the companies influence customers by more attractive substitutes, prices and
marketing strategies (Rao-Nicholson, & Khan, 2017).

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Threat of substitutes:
The major threat of substitutes of chocolate product companies is supermarket own products.
It is because they like to copy popular chocolates. The hindrance that affects chocolate
companies is to get a good locality and collect the necessities for the entry in market (Dobbs,
2014).
Bargaining power of buyers:
Donald B has a large buying power in the market. The price of chocolate products is not a
interrogation for people but increased number of opponents who offer similar products at
lower cost can be the cause of change in trustworthiness of customers. Donald B need to be
cautious in deciding prices and keep customers pleased.
Bargaining power of suppliers:
Donald B has large purchasing power due to the offering of agricultural commodities by
suppliers which is unique. However there is an prevailing competition but raw materials like
nuts, cocoa, flour, milk and special ingredients are capable enough to satisfy production of
the company. The company uses economies of scale and buy raw materials for low-cost as it
have power over suppliers.
Rivalry among existing players:
There are various companies which are already contending in the market. The competitors
have developed products and are using advanced ideas to make competition even tougher.
The brands such as Hershey’s, Ferrero, and Nestle are main competitors because these
companies are recognized in market from long time while Donald B is developing new range
of products and new promotions. Rivalry is going to be always strong because the companies
sell same products from the same stores (Sacks, et. al. 2015).
Likely competitors, what they offer and who they seem to target
The likely competitors of company are Mars, Nestle, Hershey’s, Mondelez and Lindt.
Hershey offers chocolate and sugar confectionary products, pantry items, gum and mint
refreshment products and snack items. The most renowned brands of company are Hershey,
kisses, twizzlers, ice breakers, brookside and reese’s. The company focuses on both children
and the adult market. It helps company to come up with new products. The company also

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targets mothers because they play a critical role in creating royal customers and decisions for
their children. It also focuses on the health conscious people as it offers products especially
for them.
Nestle offers coffee, chocolate and confectionery, drinks, culinary and frozen food. The
brands of company include KItKat, Nescafe, Nespresso, Toll House and Milo. The company
provides tasty and healthy choices. The company focuses on urban market than rural market.
The target market of Nestle is upper middle and high class. People can purchase healthy and
nutritious food only when they have enough monetary sources. The people of higher income
group bring profit to the company. Nestle also targets to the customers who have an
educational background. It is because they will be more concern for their health and likely to
maintain healthy lifestyle.
Lindt is a swiss chocolatier and confectionary company. It is best known for truffles and
chocolates. The offerings of Lindt are assortment, chocolate and nuts, chocolate flavours,
dark chocolate, hazelnut, milk chocolate and white chocolate (Manzini, Lazzarotti &
Pellegrini, 2017). The consumers of Lindt are of low income. It likes to target consumers who
are already indulged in premium chocolates. The target category involves women of age 25
to 49 (Barrientos, 2014). The educated mothers and households of income $50,000 are
targeted specifically.
Mondelez sells chocolate products in Melbourne. The company offers chocolate bars,
biscuits, confectionary items, nut free products, boxed chocolates, block of chocolates,
drinking chocolates and ice creams. The brands under Mondelez are Cadbury, Halls, Oreo,
Trident and Tang. It covers all the products provided by Kraft foods. It is analysed that
Mondelez targets children aged 4 to 16.
Mars uses it’s profits for expansion. The company offers chocolates, drinks, food and Wrigly.
Mars include brands such as M&M’s, Snickers and Mars bar. It has variety of products such
as caramel chocolate candies, dark chocolate cookie bars, bite-size candies, hazelnut bar,
white chocolate, stuffed snacks, peanut butter dark chocolate and more. The company aims at
driving sales for retailers. The company believes in targeting the whole people sitting on this
planet. The company believes in targeting people of each age group, size and gender
(Loutskina & Shapovalov, 2017). It is the task of Mars to recruit more users.

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Macro environment
The macro environmental factors influence the survival of company. These factors are not
directly controlled by the company. The macro environmental factors are useful tool for
understanding the growth and decline of market. It is more like a measurement tool for
business.
Political trends:
The political trend affects fast food consumption such as varying parameters for food
standards and marketing activities. The stability of government has influence on chocolate
products (McCabe, 2015). The companies are forced to adapt different political forces as per
changing global regulations.
Demographic factors:
Demographic factors in Melbourne are more likely to impact fast food consumption. The
prime driver for fast food market is disposable income of urban population particularly the
youth. The demand of youth for chocolate products is higher than the demand from other
demographics. The aging population prefer to eat more chocolate bars than other chocolate
products (Fedoseeva, Grein & Herrmann, 2017).
Natural trends: The trend keeps on updating related to fast food products. The natural trends
such as premium, healthy and flavours drive the food industry. The manufactures are exposed
to high prices of cocoa bean prices. The higher prices of material squeeze the margin of
manufacturers.
Economic factors:
The economic factors which affect fast food products are consciousness and information of
changing inflation and economic growth rates. The fluctuating budget of consumers and their
cost consciousness have impact on the products. The increasing prices of raw material goods
in relation to the need of source have economic influence on suppliers.
Technological factors:
The production and procedure of packing keep on changes due to innovation of technology.
E-commerce is a platform for development of fast food products. The concern is growing for
the environment friendly packing. The companies keep on focus on the use of biodegradable

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wrappers. The sociocultural trend of increasing health consciousness results in using
biodegradable polymeric material for packing chocolate products.
Cultural trends:
The cultural trends vary as dairy free and gluten free food is becoming popular. The society
gives more preference to such products. The products which are harmful to society should be
eliminated such as the food containing more fat and sugar. There is pressure to remove such
food items. The trend of box chocolates and packed food is also increasing as a part of culture
to gift friends or relatives (Poelmans & Rousseau, 2016).
Conclusion
From the above report it can be concluded that Donald B can successfully grow it’s brand
nationally and internationally. The buyer behaviour has been discussed in relation to
chocolate products to attain objectives on national and international level. The micro
environment is analysed to comprehend market strategy. Further the offering and targeting of
competitors is summarised in order to understand market in a better way. Finally the macro
environment has been explained such as demographic, natural, economic, political,
technological and cultural trends to know effect on fast food consumption.

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