MKT600 Marketing: Case Study - Haigh's Chocolates in Japan

This case study report examines Haigh's Chocolates' potential expansion into the Japanese market. It delves into buyer behavior, analyzing customer preferences, market trends, and socio-economic factors influencing chocolate purchases in Japan. The microenvironment is explored, focusing on suppliers, market mediators, and the importance of community and customer relations. Likely competitors such as Meiji and Nestle are identified, along with their offerings and target markets. Porter's Five Forces analysis assesses competitive rivalry, the threat of substitutes, and the bargaining power of buyers and suppliers. The macro environment is evaluated using PESTLE analysis, considering political, economic, socio-cultural, technological, legal, and environmental factors impacting Haigh's Chocolates' success in Japan. The report concludes by highlighting key strategies for Haigh's Chocolates to navigate the Japanese market effectively.

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Haigh’s Chocolates
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Contents
Haigh’s Chocolates......................................................................................................................................0
Marketing....................................................................................................................................................0
Introduction.................................................................................................................................................2
Buyer behaviour..........................................................................................................................................2
Microenvironment.......................................................................................................................................3
Likely competitors and offerings.................................................................................................................4
Porter’s five force analysis..........................................................................................................................5
Macro environment.....................................................................................................................................6
Conclusion...................................................................................................................................................8
References.................................................................................................................................................10

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Introduction
The market expansion and development are necessary to uplift profitability and revenue in the
international market. This report includes the expansion of the Haigh’s chocolates in Japan.
Haigh is Australia's oldest family-owned chocolate maker. The company was established in 1915
by Alfred E Haigh in Adelaide, South Australia. The company offers boxed chocolates, loose
chocolates, chocolate confectionery, chocolate bars, chocolate novelties, chocolate bars, Haigh’s
selections and top 10. Haigh has six stores in South Australia and now thinking to expand
operations in. This report includes the buyer behavior and the microenvironment. The report
further includes the likely competitors, their offerings and the target market. Finally it comprises
the macro environment.
Buyer behaviour
It is essential to explore the buyer’s behaviour in order to expand and sightsee the chocolate
products in the Japanese market. It is helpful in making effective decisions in the international
market. There are various components which influence the behavior and the income level of the
buyers comprehensively (Antoncic, Auer Antoncic & Aaltonen, 2016). The factors which impact
on the buying behavior of the customers are given below:
Liking and attitude of the customers
The likings, perception and taste of the Japanese customers can affect the sales and revenue of
the Haigh’s chocolates in the nation. The elements significant in evaluating the taste and quality
of the chocolates are delivery, service, brand information, advertising and packaging. These
elements are equally useful in making purchase decisions worldwide.
Product selection
The product selection is one of the critical factors which is required to be deliberated in
analyzing the buyer’s behaviour. It is observed that the customers finalize the products only after
converging and investigating the taste and quality of the chocolates (Zhang, Watson IV,
Palmatier & Dant, 2016).
Trends

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The market trends and the quality of the chocolate can affect the behaviour of the buyers in the
market of Japan. The trends in the Japanese market influence the sales and revenues of the
Haigh’s chocolates in the market. There are numerous chocolate companies in Japan which are
introducing various flavors and sizes in order to attract customers universally (Ashley & Tuten,
2015). Haigh’s is expected to introduce products in the Japanese market so it desired to drive the
market where buyers are more price conscious.
Supplier’s preferences and choice
The customers believe in purchasing chocolates from the suppliers which are trustworthy and
reliable enough to deliver good quality chocolates on time. Haigh is required to assess the choice
of suppliers in order to raise profitability in the Japanese market.
Buying time and amount
It has been observed that the customers are likely to purchase more chocolate products on special
occasions like birthdays, anniversaries, Christmas and Easter. So, the need and the preferences
are recognized by the company in order to conduct business activities in the Japanese market.
Add on the income level is also essential to assess and identify to increase sale and market share.
Socio-economic level
The socio-economic factors have also an important role in influencing the buying behaviour of
the customers globally. So, Haigh chocolates is required to concentrate on the socio-economic
factors. It is also helpful in competing rivalries in the desired market. It will help to develop a
positive image in the mindset of the buyers (Batra & Keller, 2016).
Microenvironment
The microenvironment of Haigh's chocolates comprises the following:
Suppliers
The suppliers have a great and vigorous role in expanding and exploring the business globally.
The suppliers are the persons who supply intermediary products to the manufacturers. The
suppliers offer the raw material, unfinished goods, and resources to produce chocolate products

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in the Japanese market. The quality of the products, price charged by the suppliers and the
supplier-manufacturer relationship defines the price and brand image of the company (Grönroos
& Gummerus, 2014). The efficacy and efficiency of the suppliers determine the success and
growth of the company in terms of producing chocolate products. The suppliers of the Haigh can
be characterized into two parts such as material suppliers and labor suppliers. The labor suppliers
handle and accomplish the quantity of labor and reduce the company from the scarcity of labor.
On the other side, material suppliers achieve and handle the material required by the Haigh’s
chocolates in order to produce finished products for sale in the competitive market (Wedel &
Kannan, 2016).
Market mediators
The market intermediaries of Haigh’s help to promote, allocate and sell products to the final
customers in the market of Japan. The market division of the company is helpful in promoting
and encouraging the chocolate products and represent a communication channel between the
consumers and the company. Some other intermediaries like banks support by offering funds to
the company. The banks also play important role in the stability of the business in the market (De
Mooij, 2015).
Community and customers
The customers and the community have an important role in the growth and the survival of the
business in the Japanese market. The local companies in Japan provide the chocolate products to
the customers at reasonable prices along with the profit (Erevelles, Fukawa & Swayne, 2016).
Haigh's is required to focus on the customers and community to establish the brand image and
save margins.
Likely competitors and offerings
The likely competitors of Haigh’s are Cadbury, Meiji milk chocolate bar, Nestle, Macadamia
Chocolates Company, Lindt, Chocoball grande and Ferrero. These chocolates are distributed
across many outlets. The rank of the company as compared to the other chocolate brands is
eighth. Such competitors impact the progress and success of the Haigh’s in the Japanese market
(Hudson, Huang, Roth and Madden, 2016). Meiji milk chocolate bar is one of the recognized

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chocolate brands in Japan which is successful in attracting and retaining a large number of
customers globally. These chocolate bars are branded into grids of twelve- fifteen squares which
makes easy to exchange with the friends and other persons. This chocolate company has an
impact on the functions and activities of Haigh in the Japanese market. On the other side, Meiji
almond chocolates and Macadamia chocolate brand have a strong and dynamic image in the
market of Japan. The main target of the Haigh is kids who are between the age group of 7-15
years because the chocolates are liked in the large scope (Grünig & Morschett, 2017).
Most people in Japan prefer to eat Meltykiss chocolates because of its consistency of melting in
the mouth and the availability in the different flavors in the local markets. These are cocoa
powdered cubes and wafers filled with rum raisin, strawberry, and brandy. The champagne
pocky is offered in many flavors like sparkling wine and Glico’s original pocky. Men’s pocky
and heartful pocky are enjoyed by everyone having sweet tooth. This chocolate is not presented
in several flavors in the Japanese market. It is stated that Kitkat Moleson is one of the major and
pragmatic chocolate brands in the Japanese market. People can experience three combinations
from these chocolates such as sour, crunchy and sweet in the global market (Webster Jr, 2015).
The competitors are aiming to target people kids and people who purchase chocolates on the
special events, occasions, and the festivals.
Porter’s five force analysis
Haigh's chocolates uses Porter's five force analysis to enhance its image in the international
market. The porter five force analysis has been discussed as follows:
Entry of competitors
The entry of the competitors is one of the biggest threat for Haigh’s at the time of entering in the
new market. The company has to face many competitors in the market of Japan. The major
competitors in the local market are Meltykiss chocolates and Kitkat Moleson which can affect
the strategies and policies of Haigh in the global market. Haigh is required to concentrate on the
plans and policies of the competitors at the time of introducing chocolate products in the
Japanese market.
Threat of substitutes

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The threats of the substitute products recognized are retail and supermarket’s own products
which can affect the brand image of the Haigh’s in the Japanese market. The company is
required to produce unique chocolates in the rare flavours in order to distinguish the products
from the competitors or the local producers (Katsikeas, Morgan, Leonidou & Hult, 2016).
Bargaining power of buyers
The bargaining power of buyers is high and unique in the hands of buyers internationally.
Although the price of the chocolate products is not much high in Japan the increased number of
competitors offering the same products can be problematic for the company. This situation can
even rescind the financial position and image in the mindset of the consumers. So price is the
first thing which should be considered by the company at the time of producing chocolates in the
Japanese market.
Bargaining power of the suppliers
The bargaining power is high in the hands of the suppliers. There is tough competition in the
international market. The raw materials like cocoa, nuts, flour, milk, and others are sufficient to
satisfy the necessities and requirements of the business as well as customers (Voorhees, Brady,
Calantone & Ramirez, 2016). Other than the stated factors, economies of scale, raw material, and
other resources are purchased to manufacture chocolate products globally.
Competition among the existing rivalries
There are vast competitors in the Japanese market who are producing the same products as
Haigh’s. These competitors can affect the profitability as well as the success of the Haigh's
chocolates unfavorably. Haigh is required to advance a new range of products in the Japanese
market to gain competitive benefits.
Macro environment
The macro environmental factors have a role in the survival and growth of the company. The
macro environment factors are not controllable by the company in an efficient manner. Haigh
should make unique and innovative strategies to assess international factors globally

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(Kozlenkova, Samaha & Palmatier, 2014). The Pestle analysis is one of the substantial tools to
be used by the Haigh and it is discussed below:
Political
The demand of the chocolate products has increased in Japan. The political factors influence the
consumption of fast food such as varying parameter food activities and food standards. The
political factors comprise the labor laws, tax policy, environmental law, political stability, and
trade restrictions. The government of Japan is stable and strong and it has an impact on the
chocolate products in the nation (Kumar, 2015). The political factors also comprise the products
and services which are offered by the government as an assistance of promoting business in the
country. The chocolate companies generate great revenue in Japan and are able to satisfy the
expectation of the customers.
Economic factors
The economic factors comprise interest rates, economic growth, exchange rates, and inflation
rates. It brings in notice that Japan is the third largest economy in the world with a total GDP of
$4.9 trillion in 2017. It has an impact on the chocolate makers in Japan. When Haigh's expand
business in Japan then it is required to pay tax on the income generated in the country. The
interest rates also affect the cost of capital of the company and to what extent a company can
grow and explore globally (Schuetz & Schrefl, 2017). The exchange rate also influences the
supply and the prices of the chocolate products in the local market. The budget of the customers
keeps on fluctuating which can affect the growth and revenue of the Haigh. On the other side,
increasing prices of the raw material goods and products in a link to the demands and needs of
the source have an economic influence on the dealers. Haigh is required to focus on the
economic factors in order to offer chocolate products to Japanese customers at suitable prices
(Lamberton & Stephen, 2016).
Socio-cultural factors
The socio-cultural factors comprise the cultural elements such as age, growth rate, career aspects
and the population of Japan. The cultural factors and the trends which can be assumed from the
trend gluten-free food and dairy products. The Japanese public gives more preference to such
chocolate products. The chocolate products injurious to the public should be prohibited like food

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containing more sugar and fat. There is also pressure in the country to reduce and eliminate such
food products from the grocery stores (Pan Chen & Zhan, 2018). There is a trend of packed
foods and chocolate boxes in Japan which is helpful in maintaining communal culture. Haigh is
required to focus on the socio-cultural factors so that it can struggle with the rivalries globally.
Technological factors
Japan is one of the advanced countries in terms of technology. The Japanese are more efficient in
learning and adopting innovative technologies. The country is pushing technology in an effective
way in order to compete with other countries. Japan's innovations can be explored in a variety of
fields. The country is even ahead of many other advanced countries in the case of technology
(Pike & Page, 2014). Haigh's is required to use innovative technologies in order to conduct
business activities in Japan. It can make use of e-commerce platform to make expansion
internationally. It can also make use of bio-degradable wrappers in its expansion and the
development process.
Natural trends
The natural trends have a significant impact on the prices and the specialization of the chocolate
products. The natural trends like nutrition bars, premium, and the flavors run the food industry in
the international market.
Demographic factors
The demographic factors put a direct impact on the food and chocolate consumption in Japan.
The demographic factors such as income level, choice, attitude, demand and the preference of
the customers put impact on the profit margin and the growth rate of the Haigh's in Japan
(Pihkola, et. al. 2017).
Conclusion
From the above report, it can be concluded that Haigh's chocolates can easily survive and grow
in the Japanese market. The company is capable of identifying the risks and challenges possible
in the market. Haigh’s is exploring the trends in the Japanese market to stand out against the
competitors. The buyer behavior is one of the substantial features which helps in maximizing the
sale of the chocolate products in Japan. The micro and the macro environmental factors have

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been assessed by the Haigh's to enter the market of Japan. Finally, it has been concluded that the
company is required to differentiate its products by making use of innovative technologies.

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