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Haigh’s Chocolate: Australia Chocolatier- Marketing Plan Assignment Solution

May 31, 2017
Author : Kristy

Solution Code: 1BJ

Question: Marketing Plan Assignment

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Marketing Plan Assignment

Haigh’s Chocolate Assignment

Haigh’s Chocolate is a family owned Australia chocolatier based in Adelaide SA. They specialize in handmade and single origin chocolates from Australia and around the world. The business is the oldest family owned chocolate maker in Australia and looking to increase awareness interstate and also around the world. Therefore, you are being called in as a consultant to develop new marketing opportunities to expand the brand.

You are now employed as a team of 2-3 (max.) marketing consultants to help design a Marketing Plan for them. However you will need to firstly understand the brand by performing a SWOT analysis and then designing the Marketing Mix (4P’s). Lastly, it is very important that you are able to foresee or predict potential problems you might have with making or launching the product. As a team, you are required to pitch your marketing plan to your class. Haigh’s Chocolate is looking for a creative, practical and fun marketing strategy!

Objectives of the Marketing Plan:

  • To build awareness for Haigh’s Chocolate
  • To increase brand recognition for Haigh’s Chocolate

The brief

There are many occasions, celebrations and festivals in a year. Some of them are celebrated with chocolates! Your consulting firm is given the task of creating a product, or packaging its current range of products into a product especially for an occasion of your choice. For example, for Valentine’s Day you may create a bouquet of Haigh’s chocolate roses, or a World Food Day chocolate where proceeds go to a non-profit organization or to theme the chocolates with a local festival!

Your team can decide on the product strategy by looking at the various marketing theories taught this semester. The challenge is to think outside the box and create a product that is feasible for the brand!

Your report MUST also entail a product (chocolate) design and a poster.

You can use external images, or use software (e.g. Photoshop or Illustrator) to design your product. I you should choose to, you can also bring a prototype to your class for presentation.

For more information about Haigh’s Chocolate, visit https://www.haigh’schocolate.com.au/

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Solution:

Executive Summary

Haigh’s Chocolates has a strong brand presence in Australia being a premium food manager and retailer. It is also their competitive advantage. The main aim of this report is to develop a creative, practical and fun marketing strategy for a selected product and its design and thereby applying theory in real life. The proposed product is alphabetic chocolate. The product targets couples of all ages with the recently approaching Valentine’s Day, appealing to both teens and youth because of its novelty. It will be a pleasant change from the classic heart and rose shaped Valentine’s Day chocolates. The pricing strategy for the current as well as the newly proposed product should be to increase monetary sales and sales value. The life cycle concept is also applied to the proposed commodity. This report follows the different stages of the product. The distribution of the product can take place in Sydney, Melbourne and Adelaide, all strategically placed. All its 14 retail outlets could have this product on display. Being aware of the market trends and requirements, availability of the product in these capital cities makes the product highly accessible to the target market. The tools that will be used to promote this product can be the website, the old Haigh’s cart, and the retail outlets owned by Haigh’s. The problems that might be encountered while marketing the new product could be attracting not just the loyal old clients but also expansion of the current consumer base.

Introduction

Haigh’s are the oldest Australian family owned chocolate maker, specializing in handmade chocolates, and are committed to the art of chocolate making from cocoa beans through various plantations across the globe. By roasting their own cocoa beans, it has helped them develop, their own premium milk and dark chocolate with a delicious fragrance, texture and taste. By refining their old recipes and creating new ones, Haigh’s offers a huge selection of the most mouth-watering chocolates. Apart from the popular tours given by this chocolate maker, they also give

complimentary tea or coffee along with their delicious chocolates. (Haigh’s Chocolates, 2015). The primary purpose of this report is to help students understand marketing plans, foresee potential problems, and apply theory in real life situations.

Analysis and Evaluation of the brand:

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SWOT Analysis

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Competitive Advantage and Positioning

Its Unique Selling Production is the fact that Haigh's Chocolates are the oldest Australian family-owned chocolate maker since 1915. Owning retail outlets has proven to be a long-term competitive advantage as well. Its original retail store is its prime location, at the corner of King William Street and Rundle Mall (Haighs Chocolates, 2016). The strong brand equity that is owned by Haigh's is due to the combination of brand image and brand awareness. This strong brand awareness is seen in the ability of the consumers to recall a brand through aided and unaided means. The aided recall, or also known as brand recognition occurs through the ever-growing familiarity of the brand due to prolonged exposure. Haigh's acquires this through word of mouth, well known among its customers for excellent services and products, exposing consumers through social media platforms, and having a store near Rundle Mall, the busiest at Adelaide. They use the old Haigh's cart around the street and offer taste tests after each purchase, the boutique like structure of the shop and its high quality products also contribute towards its strong brand image. The cost of promotions to attract new consumers is less, as current customers have become loyal, regular customers (Joshua, 2012). Haigh's Chocolates and The University of Adelaide are working together with Vanuatu farmers to improve the quality of their cocoa beans, thus lifting their incomes (Das, 2014). It has already been publicized that the first industrial implementation of a Baxter robot in Australia will be at Haigh's. A collaborative robot, working alongside employees is likely to attract both young and old people (O'Donoghue, 2015). They have 14 stores in total, including in Sydney, Melbourne, and Adelaide. Its Visitor Centre is quite popular, attracting people by conducting free tours and giving complimentary tea/ coffee along with its chocolates (Haigh's Chocolates, 2010.) It has a sustainability edge. It uses

biodegradable packaging, and donates a percentage sale of certain products, to non-profit organizations and numerous charities, attracting customer support (Govt of South Australia,2015).

Marketing Objectives:

Short Term Objectives:

  • Build awareness for Haigh's chocolates
  • Increase its brand recognition.
  • Working closely with the Department of State Development's Business Transformation Voucher Program, to implement the collaborative robot (O'Donoghue, 2015).
  • Focus on consumers, consistent production and service delivery (Haigh’s Chocolates, 2014).

Long Term Objectives:

  • Create Brand awareness: A benchmark needs to be created in every new market. Use Joint Venture TV advertising campaigns. Continue taking lead on sustainability by using biodegradable packaging and donating to charities as it increases consumer support.
  • Ensure that customers continue receiving chocolate experiences that have a world-class quality.
  • Keeping the prices in middle-range, so that customers can enjoy greater access to all the different products available, including the cheaper ones.

Target Market

The target market generally comprises of customers who loves handmade chocolates. There are no stores of Haigh’s outside of Australia as its main aim is to deliver world-class chocolate experiences every time. It also targets the youth who are more likely to consume chocolates than the older generation. Through various themes for occasions like Valentine’s Day, Easter and Christmas it has also increased its sales by targeting couples and families. The new product is a release for Valentine’s Day, customized in the shape of Alphabets, which targets couples. Haigh’s Chocolates provides a variety of different products at different prices. It also offers specialized products, hampers and corporate branding. It offers excellent presales service. Demographically, the target age group is all ages but specifically more on couples. The income groups being targeted are the middle-class, the upper-middle class, and the elite. As it isn’t a supermarket, the logical segments to be targeted are local, regional and national. On basis of lifestyle, Haigh’s should focus on married folks, or teenagers/youth dating. The targets however, will be light-users as the product will be tagged with Valentine’s Day alone, and advertising the discovered beneficial qualities of cocoa which selling, could attract the older couples to indulging as well (Dapin, 2013).

Product Strategy

Haigh’s Chocolates has a strong brand presence in Australia. It is both a premium food manager and retailer (Corporate Brand Manager, 2015). It balances its brand equity and its wide product range. It’s website offers Loose Chocolates, Centenary Collection, Chocolate Bars, and so on, as well as chocolates in the shape of bilbies, pandas and frogs in an effort to save their species. It offers over 250 chocolates ranging from chocolate frogs to gift boxes of hand-dipped truffles. It recently completed 100 years, marking its focus to develop its online presence, which has not impacted sales, but rather further cemented the loyalty of the customers (Inbusiness.com, n.d). In a world of profit-maximization, and shareholder pleasing behavior, it is refreshing for customers to see a company that is environmental friendly, and practices fair-trade. It received a green tick from Greenpeace for its non-genetically modified sources, which are used to make the products. It incorporates Plantic packaging in the White Ballotins chocolate box, which delivers a superior value through a combination of its environmental and cost benefits (Haigh’s Chocolates, 2008). Besides every seasonal range has a different packaging. Making the packaging elaborate and colorful like red would attract teens. For over 100 years, Haigh’s Chocolates brand has been synonymous with high-quality, premium chocolates made with artisan methods. Its products hence, appeal to not just foodies and chocolate lovers but also animal lovers, or anyone with an ecological and social conscience (Corporate Brand Manager, 2015). The product being proposed is chocolates in the shape of alphabets, thus making it selective and personal to clients who can select chocolates spelling the names of their partner, or any personal message they want to give through chocolates. It is targeting couples of all ages with the recently approaching Valentine’s Day, appealing to the teens and youth because of its novelty rather than the same old heart and rose shaped Valentine’s Day chocolates, and at the same time appealing to the older couples, through its advertising and perhaps selective discounts, further cementing their loyalty to the brand and its products. They can write their very own personalized message by selecting the alphabet chocolates.

Pricing Strategy: The prices are charged on the alphabets that will be involved in the message. Every alphabet will be charged at $1 thereby giving customers the freedom to choose. The strategy adopted here is, the pricing will be appealing and to the customer who finds the rate as individual units. But the consumers should opt for multiple alphabets to use the alphabets in a message. Therefore, it will fit in to the requirements of middle class and upper-middle class couples along with the teenagers who will find the idea appealing. Chocolate scroll can also be ordered for the display of the message, which is charged at $50.

Pricing Objective:

Haigh’s Chocolates approached $50 million in turnover and employed more than 400 people. When it moved to Sydney in 2005, it marked a point in their history, which doubled their employment and turnover (Citymag, 2014). The pricing of Haigh’s products is reasonable, and its products are high quality. Its current Valentine’s Day products are ranging between $7.95- $110.00. It’s available for all income groups. The pricing strategy for the current as well as the newly proposed product should be to increase monetary sales and sales value. The price that would be appropriate for the proposed product ranges according to the customer and the message. It’s a realistic enough price as it is still affordable without jeopardizing the brand. It would be providing a premium product through carefully controlled retail outlets. Currently in an effort to save their trade, Cadbury, Hershey’s and so on are spending $1 million to reverse the downfall of cocoa farming. Lindt, Nestle and Hershey’s have all increased prices, no thanks to the rising prices of sugar, chocolate prices this Halloween increased by 4.2% per year (Foxnews, 2016).

Product Life Cycle:

The life cycle concept may be applied to the proposed commodity. The duration of this specific product, i.e. alphabetic chocolates are likely to last only till the end of February (Cant et.al, 2009).

Production Development is the incubation stage of the product life cycle. Here, there are currently no sales, and the industry is preparing to introduce its product to the market (Cant et.al, 2009).

Introduction Stage is the stage where as the product has recently been introduced, the sales will be low, until the customers become aware of it. If Haigh’s announces the proposed product before it is introduced, the element of surprise is lost, and competitors become alert. Advertising costs won’t be very high for Haigh’s, as it mainly relies of word of mouth, and its website. It is unlikely to incur additional charges for distribution; hence in this stage due to low sales and low costs, the profits will not be negative.

Growth Stage: This is a period of rapid revenue growth. Sales increase drastically as customers become aware of the product and more market segments are targeted. If competitors enter, it is during the later part of this stage and it could cause price competition to convince clients that the firm’s product is better than that of the competitors. Here, the marketing mix can be modified as follows:

Product: The improved features of this year’s Valentine’s Day product, improvement of the product quality.

Price: Maintained high if demand is high, or low to capture additional customers.

Place: Placement near the Rundall Mall, busiest at Adelaide.

Promotion: Increased advertising to increase brand preference by using the old Haigh’s cart around a busy street.

Maturity Stage: This is the most profitable stage but sales here increase slower. By now, brand awareness and brand recognition will be strong, so additional costs for advertising will be reduced even more than it initially was. Increase in competition may result in lower market share and/ or price. Here, the main goal is to maintain market share and to extend product life cycle. Marketing mix decisions here would include:

Product: Modifications can be made and new features added to differentiate the product from

other competing products.

Price: While avoiding a price war, in response to the competition, prices can be reduced.

Place: Continue promotions through website, and word of mouth.

Promotions: Incentives can be offered like taste-testing to attract the customers of the

competitors.

Decline Stage: As market becomes saturated, the sales begin to decline. If the clients have developed brand loyalty, then profitability can be incurred for a longer period of time. Here, the firm has three options. Either maintain the product hoping competitors leave, or harvest it reducing market support, until no profits can be made, or discontinue the product if it has a better successor. The marketing mix here is as follows:

Product: The number of products can be reduced.

Price: Prices may be lowered to liquidate account of sunset products.

Place: It can remain the same as the previous stages.

Promotions: Here, it will be aimed at reinforcing the brand image for the rest of the Haigh’s

chocolates.

Place Strategy

The distribution would take place in Sydney, Melbourne and Adelaide, all strategically placed. All its 14 retail outlets could have this product on display. As it has knowledge of market in three capital cities, some in crowded areas, it would be highly accessible to the target market. In Adelaide the store is near Rundall Mall, which is likely where couples may venture on Valentine’s Day. The flagship store in Melbourne is at the fashion end of Collins Street, a historic Victorian building with beautiful architecture, would also attract couples that have come for shopping, etc. Sydney’s shopping destination, Queen Victoria Building provides a fitting location for the flagship Sydney store. All these are near locations couples, teenagers are most likely to be.

Promotion Strategy:

The tools that will be used to promote this product will be the website, the old Haigh’s cart, and the retail outlets owned by Haigh’s. As Haigh’s works with strong equity brand and word of mouth, the promotional charges will be low, as Haigh’s doesn’t believe in wholesale (Haigh’s Chocolates, 2015). It is targeting the relevant market, and it does reach the target market, as the site is available for all and a good platform for online selling and delivery. As Valentine’s Day is approaching, it appeals to all ages in a relationship to write a personal short message for their partners.

Conclusion

The problems that might be encountered while marketing the new product could be attracting not just the loyal old clients but also new ones. Recently, with rising sugar costs, and decrease in cocoa supply, (Fox news, 2016) along with a hike in costs (energy costs by 27%, wage costs by 10%), profitability reducing in the past few years (Austin, 2012). Many attempts have lead to low market share, yet inability to expand business. It’s recently started selling its products online. It needs to widen its scope. Chocolate Confectionary in Australia has slowed down in 2015, with the retail value growth as 3% currently, down from 2013 and 2014 of 5% value growth (Euromonitor international, 2015). But this slow down is expected due to many clients embracing portion control, the low value of Australian dollar which hikes the prices of premium imports and increases the possibility of cocoa shortage.

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