MKTG6002 Marketing Case Study: Donald B's Global Expansion Strategy

This case study examines Donald B's potential global expansion, focusing on the chocolate industry and its competitive landscape. It delves into consumer behavior, analyzing factors influencing purchasing decisions, including taste, advertising, and quality. The microenvironment is explored, highlighting suppliers, distributors, and the readily available demand for chocolate products, particularly among children. Key competitors like Cadbury, Nestle, and Mars/Wrigley's are identified. The case study uses the example of Melbourne, Australia to present the opportunities and challenges Donald B may face in the global market and how to overcome them. This assignment is available on Desklib, a platform offering a wide range of study resources, including past papers and solved assignments, to support students in their academic pursuits.

Running head: DONALD B GLOBAL EXPANSION 1
Donald B Global Expansion
Name
Institution

DONALD B GLOBAL EXPANSION 2
DONALD B GLOBAL EXPANSION
Introduction
Donald B is a chocolate product maker and owns two stores in Melbourne. He wants to
grow his brand nationally and internationally and compete with larger rivals producing the cocoa
product, confectionery, crystallized or glazed fruit, drinking chocolate, licorice, marshmallow,
candied nut, candied popcorn, etc. He has also considered selling through Coles and
Woolworths, Aldi options or creating high-end specialty stores.
1. Buyer Behaviour about chocolate products
The phrase consumer behavior denotes the behavior which they display when searching
for, buying, utilizing, evaluating as well as disposing of the services and products which they
anticipate shall satisfy their respective needs (McGrath, Aronow & Shotwell, 2016). The
consumer behavior study is the examination of how the individuals decide to spend their
corresponding available resources including effort, money and time on the consumption of the
related product. It encompasses the study of what the consumers buy, why they purchase them
when they are buying them, where they purchase them, and even how frequently they purchase it
as well as how often they utilize such products. The information relating to the decisions by the
consumers to buy or also reject the commodity is a moment of ultimate truth for the marketer. It
denotes whether the strategy for marketing is wise, compelling, insightful, or whether it
remained poorly planned as well as missed the mark. Therefore, the marketers are specifically
interested in the decision-making process of the consumers. The model of consumer decision
making can be described based on the inputs, process, and output (Rousseau, 2015).
Inputs: The input element of the model derives from external influences which act as the
sources of info regarding a given product and impact of the product-associated values as well as

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behavior of the consumers (Beneke, Floyd, Rono & Sherwood, 2015). The main reason among
such input variables includes the marketing-mix task of the firm which tries to convey the
benefits of their commodities to their potential clients, and the no marketing socio-cultural
impacts, that, when internalized efficiently, influences the buying decision of the consumer.
Process: The processing element of the model is dealing with how consumers make their
decisions. The psychological field denotes this process. The internal impacts include perception,
motivation, learning, attitudes personality which influence the decision making the process of the
consumer to buy the chocolate. Purchase activity-Once the consumer has identified the problem
(need to buy chocolate), he or she will indulge in the pre-purchase undertaking. It is
comprehended that a need is a father of a deed (Moser, 2016). A time lag exists when an
individual thinks to purchase chocolate and the real incidence of purchasing. During this point,
the potential buyer becomes increasingly energized and is probably to be impacted by many
factors. The need arousal propels the consumer to gather info regarding the needed chocolate.
The potential consumer will then indulge in the internal search including scanning the
psychological field to recollect and retrieve the desired information or previous experience
linked to a given chocolate brand (Verhoef & Van Doorn, 2016).
The psychological field of a given consumer entails his previous learning. The
personality, perception, and experience. If the potential buyer is never satisfied by the brand,
then he will go in for the external search about the chocolate and looks for many sources of
information. The extent of perceived risk is also influential at this phase of the decision process.
In the high-risk context, they are probably to indulge in complex information search alongside
evaluations tactics. Of central interest to the marketer of chocolate, a product is an array of
information sources that the potential consumers shall return to as well as the relative influence

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that they shall have on his buying behavior (Saini & Lynch, 2016). Evaluation Alternatives:
When the potential consumer is evaluating the many alternatives, he tends to utilize two kinds of
info. The consumer will use a “list” of chocolate brands from where he is planning to make his
selection also called the evoked set. The consumer will also use the criteria she will utilize in
evaluating each brand. Such requirements constitute her invoked sets often expressed by
essential product attributes. A consumer utilizes some procedures and rules that facilitate his
choice among the multi-attribute objects. The decision rules of the consumer have been widely
categorized into two primary categories: compensatory and non-compensatory. A comprehension
of which rules a consumer employ in the selection of a given chocolate brand is valuable to
marketers concerned with the formulation of a promotional programme.
Output: The output constituent of the consumer decision-making model regards two
closely linked types of post activity. These are the purchase behavior as well as the post
purchases evaluation. Where the consumer buys chocolate for the initial time and purchases a
smaller quantity than usual, this buying would be regarded a trail. This is the exploratory stage of
buying behavior whereby a potential chocolate consumer tries to evaluate a chocolate brand via
direct utilization. Where the new brand of chocolate is established product category is discovered
by trail to be increasingly satisfactory or even better than other chocolate brands, the potential
consumer is probably to repeat the buying. Repeat buying behavior is closely linked to the idea
of brand loyalty that firms attempt to urge since it accounts for greater stability in the
marketplace.
The consumer behavior is determined by chocolate taste. This is the most critical factor
that many consumers use in deciding on whether to buy the chocolate or not. The consumers
give preference to take as they consider other factors, however, taste is reported to the first

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preference. The buying behavior determining the decision to buy the chocolate is also dependent
on the different advertisements. The most influencing media for this decision is the electronic
media especially the television, and from the reference from group friends are the at the most
influencing stance. The quality of the chocolate is another essential factor that influencing the
consumer buying behavior for chocolate. This is a crucial factor which buyers always consider as
they switch over to any other chocolate brand of milk chocolate bars. Further, consumers are also
attached to the foreign brands of chocolate and demand that additional numbers of overseas milk
bars brands. This shows that the demand for chocolate is determined by the foreign products.
The consumer buying behavior for the different brands of milk chocolate bars is further
determined by the various factors like taste, price, packaging, and brand. Also, the consumer
always checks as well as consider the manufacturing alongside date of expiry as they buy any
chocolate.
2. Microenvironment
There is a range of vendors that can supply the raw materials or even need to import from
outside the country. The company can benefit from the internal set up as this will be helpful in
serving the demand in the lead time. The firm will have ready suppliers, manufacturer/factory,
mother warehouse, distributor/wholesales, and retailers thus serving its end consumers who are
mainly the children. The firm will get milk supplied in abundance in Melbourne. For example,
Milk Unlimited will be providing effective milk delivery services for the Company. This is a
trusted milk distributor, and thus it can sustain the company’s demand for milk to ensure
constant production to meet the global demand. The firm also delivers other dairy products
including creams, cheese, and butter. These products are well-organized as well as Australia
made, and brands which are provided in full promptly. The firm can also get milk supplied from

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Riverina which has successfully served the CBD alongside South East. This supplier is loved
because of its consistency concerning both delivery and quality all year round. The Milk Guys
will also supply milk effectively to the company because it is mainly specialized in the wholesale
distribution of all things dairy as well as most of the present-day famous retail food groups
including cheeses, small goods, eggs, and antipasti. The firm can have its products distributed by
the Roberts Confectionary which is already an established distributor of these chocolate products
and in so doing helping the firm expand globally at a much lower cost.
The firm will have warehouse or mother warehouse in Melbourne, and this will be
readily available. This is because the firm currently owns two stores from which the products can
be produced and kept and expanded to other stores based on the production and the sales
volumes. Also, the firm will be able to get a readily available demand since many children love
the chocolate products from a global perspective and hence many will buy the products. This is
because the chocolate industry in Melbourne, Australia is an already expanding industry. The
industry has been estimated to have a potential growth rate in the country. Therefore, the
industry in itself has a tremendous opportunity particularly in the untapped rural segments of
many countries where there is a massive customer need for affordable and yet high-quality
products. Till a few years ago, the pre-liberalization, many cocoa-based commodities stood
solely limited to the well-off sectors/segments of society. Nevertheless, post liberalization in
many countries alongside the advent of surged GDP and the purchasing power of the layman,
chocolate products have since become affordable and hence presently increasingly common in
any domestic households.
In a global market for chocolate perspective, the industry is a highly labor-intensive one
who besides agricultural undertakings, require labor input from each aspect. Therefore, for a

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state like Melbourne, Australia, chocolate manufacturing offers an excellent opportunity to
skilled workforce resources that are available in the country. Therefore, the new opportunities
together with new markets are continually created in the developing nations new to the advent of
industrialization for the chocolate industry. Thus with the new distribution channels being
developed, this company will enjoy the advent of great opportunity for the developing nations
concerning this chocolate industry. The developing countries like India and China have several
rural areas whereby chocolate products are never offered yet. Thus, the expansion of this
company and the market penetrations into the emerging and developed economies like India is
being regarded highly preferred.
Chocolate is a unique product that is broadly consumed by every segment of consumers
regardless of their sex and age. Therefore, where the company will find a five year old
consuming the product, there would be a sixty-year-old also going to the local shot for chocolate.

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Therefore, the above pie chart shows that chocolate consumptions remain widespread in
all sex as well as age groups. Thus, the company will have a global huge customer base to cate
for when it expands globally. The customer loyalty is also essential micro-environmental factor
in the chocolate industry. Because the demographics remain increasingly transparent, the most
significant variable, therefore, for this company becomes the retention and satisfaction of the
customers that dictates the loyalty of the customer for a specific brand of chocolate. Thus, for
such customer loyalty level, good and high quality of chocolate accompanied by flawless
packaging as well as distributions remains incredibly essential for this company.
3. Competitors
The primary target for chocolate products is the children. The main competitors include
Cadbury, Nestle, Mars/Wrigley's, and Hershey’s. The main competitor is Cadbury. This is the
most iconic confectionary brands in the globe. The firm is famous for its Dairy Milk Bar. It is
currently a part of the Mondelez International. The firm is part of the company with a leading
global market share for the chocolates. The Mondelez International has a strong market share
stance as seen in the year 2014. The strong number one market share in the Asia-Pacific region,
Africa/ the Middle East and European regions have supported its overall number one global
position. In Latin America, Mondelez International was ranked position two in the year 2014.
The lowest market share of the company was witnessed in North America in where it was listed
position five. The firm faces strong competition from some firms in North America as well as
around the globe. However, it has remained the market leader in this industry right from its
inception in the year 1947. The firm currently employs many workers than any other globally.
The company remains the most active participant in this industry specifically the confectionary

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wing. The firm has displayed a continuously strong revenue growth as well as net profit growth.
The firm has an enormous umbrella of brans including 5 Star, Dairy Milk, Perk, Bytes,
Celebrations, Bournvita, Delite, Temptations as well as Chocki. It has a huge range of products
array, and it reaches millions of loyal clients. Cadbury has a large distributions network globally.
Mars/Wrigley’s is a knowledgeable name; however, as a private firm, it has not been one
investor can get behind. In the year 2014, the firm had a market share of about 29.50% in the US
for the chocolate market. A share of the firm’s best-known brands includes Snickers, M&M,
Twix, Starburst as well as Skittles. The company became the 7th-biggest private firm in America
in the year 2014, with the sales value of 33 billion dollars. The firms rival in six segments
including chocolate, food, pet, gum, symbioscience, and drinks.
Hershey’s will be another fierce competitor in the chocolate industry. In the year 2014,
the firm had a market share of about 44.0% in the United States for the chocolate industry. The
firm as several favorite brands in the United States amongst them Hershey’s, Twizzlers, Rancher
as well as Reese’s. The Hershey’s gets above 80 percent of its yearly revenue from North
America market. The firm had triggered uproar in this industry when it filed a lawsuit against
many importers of Cadbury products in the United States. The firm utilizes various recipe as
compared to the British chocolatier, and several former British citizens desire the authentic
version. Whereas Cadbury highlights milk as the number one ingredient the American version of
Hershey’s lists sugar as its number one ingredient. Hershey’s stays in the different stance
because it is both a rival and distributor of the products of Cadbury.
Nestle is another potential competitor. It is a big food company in the globe, and it covers
various subsectors of a market. The chocolate market of Nestle is one of its smallest sectors,
however, it is good enough for over 5.8 percent market share in the United States. The firm has

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expanded through various acquisitions which have accorded it control of brands including Kit
Kat, Gerber baby food as well as Smarties. Nestle’s confectionery sector was its 6th-largest in
the year 2014. Nestle enjoys about 9.7 billion dollars regarding its global sales, and hence it
holds position three market share. The company chocolate sales products hit seven dollars billion
globally with America alone accounting for four billion dollars. It is one of the oldest food
manufacturing MNCs with its presence of over 100 years. The firms are Swiss-based and have
many manufacturing plants. It diversifies in a range of sectors like Baby Food, Beverages, Milk
products, chocolates as well as confectionary alongside other processed food products. The
chocolate sector contributes about 14.0% of its annual turnover in India. Nestle remains the
swiftest expanding firm in the chocolate industry. The Kit-Kat brand remains its most prominent
selling chocolate brand globally. Others Nestle brands including Milk Bar, Crunch, Marbles,
Nestle Rich Dark, Much and Bar-One are also popular globally.
4. Analyze the macroenvironment.
The macro environmental factors are those variables that are not directly controlled by
the industry or company. The chocolate industry is a highly fragmented one with a diverse array
of macro-factors influencing the industry. This following diagram depicts the primary factors
under the framework of PESTEL.

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Political-legal factors
The government policies are employer-friendly in this industry, and the import duties in
the country remain increasingly better. This will support the operation of the firm to expand
globally. The tax policies related to this industry are never harsh, and hence there will be a good
environment availed to support the firm (Mierzwa & Zimmer, 2017). The profit-sharing ration
with the government will thus favor the company as the taxes are never discouraging to the firm.
Even after paying the taxes, the firm will remain with a considerable amount of profit which will
mean growth and expansion of the firm globally. The foreign direct investment in Australia is a
good one, and this will support the firm. The guidelines for the food industry in Australian are
never harsh, and when adhered to by Donald B, the firm will benefit from low interruption from
the government agenesis (Leyte, Pacardo, Rebancos & Protacio, 2017). Thus, Donald B should
exploit this supporting political as well as legal policies of the Australian government to be
successful in its expansions. By this, it will have smooth penetration in a global market.
Technological Factors:
The company will have to adhere to the requirement of safe, efficient as well as
sustainable manufacturing of its chocolate products and associated products which remains the
focal point for its production department. By this, the firm’s chocolate will follow the industrial
norms per each country and confer to the established standards of milking and milk processing
(Kew & Stredwick, 2017). These standards will be met by using the state of the art technology
that confers to the EURO III norms. The radio frequency identification technology also provides
the company with the best means to ensure efficient distribution alongside inventory
management (Mrmošanin et al., 2018). The company will also benefit from the other efficient

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technologies including SIGMA and LEAN manufacturing as well as 5s thereby ensuring
efficiency and minimal wastage in production.
Environmental Factors:
The conditions of the environment in Australian favor the chocolate production,
nevertheless, because of latest pollution levels, there is a major concern for the sustainable
chocolate manufacturing process. Thus, the company must decide to import its raw materials to
put minimal pressure on its agriculture. Moreover, additional minimal waste production
guidelines are adhered to by Donald B (Cavicchi, Simeone, Santini & Bailetti, 2016).
Socio-Demographic Factors:
The chocolate consumers persistently alter their perception as well as needs for products.
Particularly, in the chocolate industry, the needs of the customers are altering periodically from
the richer commodities leading to the rise of commercial bakeries to huge varieties as well as
forms of the chocolates alongside its forms (Bellucci, Mari, Picciaia & Terzani, 2016). Thus, the
chocolate industry in Australia provides a large opportunity to tap this large sector of customers
through the provision of the new tastes and varieties. Of late, the health benefits of dark
chocolate so discovered are taking this highly opportunistic industry on a full new path.
Available skilled workers as well as growth in everyday wages all points towards the
development and growth areas of chocolate industry (Bellucci, Mari & Picciaia, 2016).
Economic Factors: Based on FDA survey on the market size of chocolate was
approximated to be around 4.15 billion in the year 1998. The sugar and chocolate confectionaries
are marred by low penetration levels. The growth of the market in the chocolate sector has been
between ten and twenty percent. A great portion of consumers is situated in the urban areas. The

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rural areas or the rural market in Australia are to a great degree untapped with chocolates with
highly low levels of penetration thus giving a highly untapped market.

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