International Marketing Management: Toms Australia Market

This report provides an in-depth analysis of Toms Confectionery's potential for international expansion into the Australian market. It begins with an introduction highlighting the company's objectives and the rationale behind selecting Australia as the target market. The report then delves into the general market attractiveness, assessing market size and growth trends, analyzing the competitive landscape, and evaluating the geographical infrastructure. It also examines cultural, economic, and political constraints that could impact Toms' entry and success in Australia. The analysis includes an overview of market attractiveness, summarizing key threats and opportunities. Finally, the report concludes with strategic recommendations for Toms, including investment decisions and product customization strategies, to maximize its chances of success in the Australian confectionery market. The report uses data from 2013 to 2019.

Running Head: INTERNATIONAL MARKETING MANAGEMENT 0
tOMS
INTERNATIONAL MARKETING MANAGEMENT
student name
4/19/2019

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Contents
Introduction......................................................................................................................................2
General market attractiveness 280...................................................................................................3
Market size and growth...............................................................................................................3
Competition.................................................................................................................................3
Geographical infrastructure.........................................................................................................4
Cultural constraints 280...................................................................................................................4
Economic constraints 150................................................................................................................5
Political constraints 150...................................................................................................................6
Market attractiveness – overview 210.............................................................................................7
Recommendations 150.....................................................................................................................8
References........................................................................................................................................9

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Introduction
Tom chocolate confectionery company is willing to expand their business internationally for
which the selected foreign market for this assignment would be Australia. The reason for this
selection would be the company’s objective to increase the profit margins for the company
through premium chocolate products. Australia comes under top fifteen nations for the
confectionery market. As per the research, the chocolate consists of maximum portion in the
Australian confectionery market (Adam & Kotler, 2014). The report will include the analysis of
the external environment like political, cultural, and economic constraints.

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General market attractiveness
Market size and growth
Chocolate and Confectionery Manufacturing industry have challenged shifting customer
preferences over the previous five years. Rising consumer apprehensions about the extent of fat
and sugar in foodstuffs have debilitated demand for old chocolates and confectionery over the
time span, predominantly in respects to mass-produced goods. Furthermore, customer demand
for premium goods has enlarged over the earlier five years that has increased the industry's
performance. In view of the market size, of the chocolate confectionery industry of Australia the
yearly growth of the business from 2013 to 2018 is 0.7%. Australia chocolate marketplace
mounted at $ 2.9 billion in 2017. It is anticipated to exceed $ 4.3 billion by 2023, for increasing
chocolate intake and growing demand for niche manufactured goods groups like organic
chocolate goods (techsciresearch, 2019). Additionally, the growing emphasis of chocolate
manufacturers on proposing innovative products have increased the market competition and
presence (beverland , 2016).
Competition
The main players working in Australian chocolate marketplace are Mars Australia Pty. Ltd.,
Mondelēz Australia Pty. Ltd., Lindt & Sprüngli (Australia) Pty. Ltd., Ferrero Australia Pty. Ltd.,
Nestlé Australia Limited, Darrell Lea Confectionery Co. Pty. Ltd, Aldi Stores Supermarkets Pty
Ltd. Haigh Pty. Ltd. A.E., J.H. Whittaker & Sons Limited, and Stuart Alexander & Co Pty Ltd
(confectionerynews, 2019).

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Additionally, the growing emphasis of chocolate manufacturers on proposing innovative
products have increased the market competition and presence. For example, Mondelēz initiation
of Cadbury Dairy Milk by means of Oreo in strawberry mint and flavours is predictable to
certainly affect the nation’s chocolate market in the approaching years (Balmer & Abratt, 2016).
Geographical infrastructure
The geographical infrastructure of Australia is strong enough for the company to distribute the
goods in the company or implement distribution strategy using various channels is approachable
for Toms (Calboli, 2015). The geographical constraints would also include population factors.
The research says that the population is rapidly increasing in Australia, which can be taken as an
opportunity for the company to target a larger population size (theglobaleconomy, 2019).
Cultural constraints
As discussed before, Australia is one of the top nations when it comes to chocolate nations. The
consumers prefer to purchase chocolate bare or boxes of chocolates. The purchase behaviour
shows that people like to purchase chocolates for themselves, and more often for gifting purpose.
From the research it can be said that Australian’s love chocolates, which would definitely similar
to that of the culture expected by Toms. Moreover, it has been researched that the customers
believe that the box packaging of chocolates are more preferred as it is assumed that it is the
special believe that could be helpful to brightening someone’s day. This is purchased for the
loved ones and for friends to share the joy and it adds enjoyment as the message through
chocolates. However on the other hand the obesity rate in the nation is increasing as well, due to
which the eating habit are tried to change by the customer. For instance, people are shifting to
yogurts in replacement for chocolates, which could be a threat for the company (Petersen, 2015).

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Competition is very high in the industry in Australia, one of the most popular and old companies
Cadbury is presumed to be favourite chocolate for the customers when considering price
differentiation or mass strategy of the company. While in the case of premium products, the
competitors in Australia include Lindt and Ferrero (Brown & Dant, 2014).
There would no need for Toms to educate the customer or create the product awareness in the
nation, as the country is very much familiar with the products and have already been tapped by
many national and international companies. The customers in Australia would accept the
products by the Toms but the company has to conduct a large amount of investment in
promotional activities for brand awareness and brand recognition as the brand loyalty in this
industry seems to be strong for major global players like Cadbury. The company has to come up
with customization of the products in this nation like unique flavours, different combo packaging
as per the festival of special occasion like Valentine’s Day packaging to attract customer to gift
chocolates to their loved ones (Read, 2013).
Economic constraints
Figure 1: (Source: (theglobaleconomy, 2019)

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From the GDP growth factor of the country, it can be said that the rapid increase in GDP is
expected, which reflect that the spending power of customers would high. This could be one of
the opportunities for the company to grow business in this nation as the people would not
hesitate to spend money on such products if their consumption power is increasing (Findlay &
Garnaut, 2017).
Political constraints
Australia is identified to be the sixth largest country across the globe that could be beneficial for
the company to gain opportunity. The chances for demand to be increased through conduct
business in this nation can be observed. However, the political stability as per the statistics has
been found decreasing since years that reflect that the political risk could be the threat for the
company while trading in this nation for Toms.
Figure 1: (Source: (theglobaleconomy, 2019)

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Moreover, as per the statistics the corporate tax in Australia is stable since many years that is
around thirty percent that reflects that the business could gain better profit margins while
working in this nation (theglobaleconomy, 2019). However when compared to Denmark the
corporate tax is around 22 percent which is quite low than that of Australia, making it more
feasible to invest (tradingeconomics, 2019).
Market attractiveness – overview
From anylzing the above constraints and assessing the Australian chocolate industry, major
threats or problems and opportunities would include, firstly threats for Toms:
1. Competition - Cadbury dominates the chocolate market of Australia with 55% share
market and the next market share is of Mars that is 18%, followed by a share of 14% by
Nestle. These competitors are the threats for the company. Moreover, innovation in
product and packaging are the major expected constraint by the customer, which could be
an opportunity for the company.
2. Political risk – As discussed the political stability is decreasing, that could be a threat for
the company to sustain in the market for long.
3. Existing brand loyalty – The brand loyalty for top companies like Cadbury has placed a
position since years that has created brand loyalty for the customers. This can be a threat
for the toms as it has to first decrease the brand loyalty and increase brand awareness
among the residents of the nation.
4. Increase in obesity rate – Australia’s obesity rate has been increasing since years which is
a threat for the company as the customer preference is changing and could change
drastically in the near future.

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Opportunities for Toms in Australia
1. Chocolate lovers – It has been found that the people love chocolates in this nation, which
could be a great opportunity for Toms. The change for the adoption of the products would
also increase with this.
2. Purchasing behaviour – People in this nation purchase Chocolate boxes not only for
themselves but also for the gifting purpose, which makes it an opportunity for Toms to
target such market and customer segments.
3. Culture – The cultural factors are in favour of investing in the nation as this market is
growing and as per the forecast, the industry will grow in the next three years.
4. Economic factors – These are the opportunity for the company as the GDP of the
company is increasing of this nation.
Recommendations
 Investment decision – From the analysis and audit it can be said that Tom must invest in
this nation as the opportunity is very high in such a developed nation. There would be
some threats that the company could overcome if conducting strong business
management.
 Objective fit – It is found that the objective of the company that is through increasing the
profit margins by offering premium products and a strong international position can be
achieved by Toms through investing in this Australia. However, the company can
customize the product by adding flavours and adding quality of sugar and cocoa as per
the residents of Australia preferences.

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References
Adam, S. & Kotler, P., 2014. Principles of marketing. Australia: Pearson Australia.
Balmer, J. & Abratt, R., 2016. Corporate brands and corporate marketing: Emerging trends in the
big five eco-system. Journal of Brand Management, 23(1), p.3.
beverland , M.B., 2016. Implementing Market Orientation in Industrial Firms: A Multiple Case
Study¿. In Market Orientation, p.59.
Brown, J.R. & Dant, R.P., 2014. The role of e-commerce in multi-channel marketing strategy. In
Handbook of Strategic E-Business Management, pp.467-87.
Calboli, I., 2015. Geographical indications of origin at the crossroads of local development,
consumer protection and marketing strategies. IIC-International Review of Intellectual Property
and Competition Law, 46(7), p.760.
confectionerynews, 2019. Premium-chocolate-growth-in-Australia-Leatherhead. [Online]
Available at: https://www.confectionerynews.com/Article/2013/12/17/Premium-chocolate-
growth-in-Australia-Leatherhead.
Findlay, C. & Garnaut, R., 2017. he political economy of manufacturing protection: Experiences
of ASEAN and Australia. London: Routledge.
Petersen, J.A., 2015. Marketing communication strategies and consumer financial decision
making: The role of national culture. Journal of Marketing, 79(1), pp.44-63.
Read, G., 2013. A political, economic, social, technology, legal and environmental (PESTLE)
approach for risk identification of the tidal industry in the United Kingdom. Energies, 6(10),
p.5023.
techsciresearch, 2019. australia-chocolate-market. [Online] Available at:
https://www.techsciresearch.com/report/australia-chocolate-market/1711.html.
theglobaleconomy, 2019. Australia/corporate_tax_rate. [Online] Available at:
https://www.theglobaleconomy.com/Australia/corporate_tax_rate/.
theglobaleconomy, 2019. Australia/gdp_current_local_currency. [Online] Available at:
https://www.theglobaleconomy.com/Australia/gdp_current_local_currency/.
theglobaleconomy, 2019. Australia/Population_size. [Online] Available at:
https://www.theglobaleconomy.com/Australia/Population_size/.
theglobaleconomy, 2019. Australia/wb_political_stability. [Online] Available at:
https://www.theglobaleconomy.com/Australia/wb_political_stability/.

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tradingeconomics, 2019. corporate-tax-rate. [Online] Available at:
https://tradingeconomics.com/country-list/corporate-tax-ratehttps://tradingeconomics.com/
country-list/corporate-tax-rate.