TERMS OF REFERENCE

The objective of the marketing planning exercise is to examine the business marketing environment, identify potential opportunities and threats and develop strategies to compete with the existing firms at large and form a plan of action to improve marketing performance and gain a competitive advantage.

EXECUTIVE SUMMARYThe coursework will broadly focus on the micro environment and the macro environment surrounding the Indian Chocolate Industry and it will try to justify the coursework through various examples. It will also do a swot analysis which will help us in understanding the strengths, weaknesses, opportunities and threats which can restrict the Indian Chocolate Industry. We will define our core strategies which will help us in identifying the target customers and will help in not only competing with our competitors but also establish ourselves successfully. The very important component of this report would be the marketing mix decision, i.e. product, price, place and promotion and in the end summary would give the gist of everything.

INTRODUCTION

D’s Chocolate manufacturing co started it’s operation in south Africa around 67 years ago. After gaining a majority stake in various chocolate products, it moved its businesses to various other markets such as New Zealand and Australia.

Having established itself well in all these markets, D’s Chocolates now plans to expand itself in the Indian market. Our company will be focusing on quality products with the aim to establish ourselves with the largest and the most efficient distribution network in INDIA

Our wide range of products will be

1. Chocolate bars2. Chocolate candies3. Panned chocolates4. Assorted chocolates

VISION

To be the largest global manufacturer of chocolates

MISSION

To provide healthy, high quality products with an efficient and sustainable distribution network in order to be the pioneers in the chocolate industry

CORE VALUES

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1. Dedicated research and development2. Focus on sustainable usage of resources3. Focus on quality of products, processes and people

MARKETING PLANNING PROCESS

The marketing planning process will help in developing a systematic framework for understanding the analysis and decision-making processes involved in market planning. It also helps to understand how the key elements of marketing relate to each other.

EXTERNAL MARKETING AUDIT

The marketing environment for any industry/organization comprises of following components

a. The Macro Environmentb. The Micro Environment

Source:- http://www.marketingteacher.com/lesson-store/lesson-marketing-environment.html

THE MACRO ENVIRONMENT

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The factors under macro environment are those factors that are not under the direct control of the company or industry

The chocolate industry in India is an extremely fragmented industry with a diverse range of macro-factors influencing it. The following are the main factors under the PESTEL framework

POLITICAL-LEGAL FACTORS

We at D’s chocolates have thoroughly scanned the various political factors influencing the Indian Chocolate Industry.

D’s Chocolates does not support CHILD LABOR. All its products and raw materials that are procured from all over the world are from workshops free from child labor and adhere to all the guidelines so put up by the Indian laws and govt. D’s Chocolate is also joining its hands together with various NGO’S to combat child labor in chocolate industry.

The food industry guidelines by the Indian govt. are followed completely by the company which prohibits import of raw materials from a set of African countries due to the prevalence of child and woman harassment issues.

With the supporting political and legal policies of the Govt. of India, we at D’s Chocolate are confident of successful and smooth penetration of the Indian Food and Beverage Industry. In order to support the same major steps and clearances have been already undertaken

A majority of them being

1. Clearance from food authorities such as FDA of India for all the food products2. Clearance from Chocolate Manufacturing Association of India3. Clearance of labor and ESI laws/guidelines

TECHNOLOGICAL FACTORS

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Safe, Efficient and Sustainable manufacturing of chocolates and other related products is the focal point of our production department.

We at D’s chocolate follow the Indian industrial norms and confer to the outlined standards.Milking and milk processing , which forms the majority and important part of production is undertaken with the help of latest and state of the art technology conferring to the EURO III norms.

For efficient distribution and inventory management, latest RADIO FREQUENCY IDENTIFICATION technology is being utilized. Various other technologies for efficient and minimal waste production are being utilized for instance SIX SIGMA, LEAN MANUFACTURING and 5s

ENVIRONMENTAL FACTORS

The environmental conditions of India favor the production of Cocoa beans however due to recent pollution levels and deforestation; major concerns for sustainable chocolate manufacturing processes have been raised. We at D’s Chocolate have decided to import a majority of raw materials in order to put minimal stress on INDIAN Agriculture. Other guidelines for minimal waste production are going to be completely followed and adhered to.

SOCIO-DEMOGRAPHIC FACTORS

Consumers constantly change their perception and needs for products. Especially in chocolate industry, the customer needs are changing periodically from richer products leading to emergence of commercial bakeries to large varieties and forms of chocolates and its forms.

Hence the Chocolate Industry In India provides us with a huge opportunity to tap this huge segment of customers by providing them with new verities and tastes. Recently the health benefits of dark chocolates so found are taking this extremely opportunistic industry on a complete new path.

Available of skilled labor and growth in daily wages all indicate towards the growth and development areas of this industry

ECONOMIC FACTORS

According to the FDA SURVEY market size of chocolates was estimated to be around 4.16 billion in 1998.

Chocolate and Sugar confectioneries are characterized by low penetration levels. Market growth in the chocolate segment has been between 10 to 20%. (According to latest FDA SURVEY data)

A majority of consumers are located in the URBAN AREAS. Rural area / Rural markets in India are to a great extent untouched with chocolates with extremely low penetration levels hence providing an extremely untapped market representing a quarter of INDIA’S population.

MICRO ENVIRONMENTAL FACTORS

Micro environmental factors are those that directly influence the company/industry.

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MARKET OVERVIEW

Indian Market Overview for chocolates

Chocolate industry belongs to the FOOD PROCESSING INDUSTRY which has an estimated size of US$ 70 Billion( Ministry of Food Processing, Government of India) and contributes to around 6.3% of INDIA’S GDP. (Ministry of Food Processing, Government of India)

The chocolate industry in India is estimated to be of Rs. 650 Cr with a as high as 15% market penetration and as low as 4% market penetration in rural areas. (Ministry of Food Processing, Government of India).The Confederation of Indian Industry (CII) has estimated that the food processing sector a potential of attracting US$ 33 billion of investment in 10 years thus generating employment to 9 million people.Thus the chocolate industry is being estimated to have a potential growth rate of around 7-9% every year(Ministry of Food Processing, Government of India).

Thus the chocolate industry in itself has a huge opportunity especially in the untapped rural segment where there is a huge customer need for affordable yet high quality chocolate products.Till recent times pre-liberalization, cocoa based products were only restricted to the well off segment of the society, however post liberalization in 1991 and the advent of increase in GDP and the Purchasing power of the common man, such products, have become for affordable and are now very common in any domestic household.

Global Market overview for Chocolates

The chocolate industry is an extremely labor intensive industry which apart from the agricultural activities needs labor input from all aspects. Hence for a country like India, chocolate manufacturing provides great opportunities to skilled labor resources which are available in developing nations such as China and India. Industrialization is becoming advent in new and developing nations.

Hence new opportunities and new markets are being created for all industries. With new distribution channels being developed there is an advent of great opportunity for developing nations with regard to this industry. Developing countries such as China and India, have many rural areas where chocolate products are not offered yet. Hence expansion and market penetration into developed nations such as INDIA is being considered extremely favorable.

CUSTOMER ANALYSIS

DEMOGRAPHICS OF CUSTOMERS CONSUMING CHOCOLATES

Chocolates are a unique product which is widely consumed by almost all segments of customers irrespective of their age and sex.

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Hence where u will find a 5 year old consuming chocolate, there would be also a 60 year old going to a local shop for one.The demographic wise break up of chocolate consumers is

SOURCE OF DATA: FDI SURVEY, 2004

Hence this data clearly shows that chocolate consumption is widespread in all age and sex groups largely. This provides us with a huge customer base to cater.

CUSTOMER LOYALTY

Since the demographics are transparent the most important factor hence becomes CUSTOMER RETENTION AND SATISFACTION which determine the customer loyalty for a particular productHence for such levels of Customer loyalty good and high quality of the product with flawless packaging and distribution are extremely necessary.

COMPETITOR ANALYSIS

There are a few major players in the INDIAN CHOCOLATE INDUSTRY

1. Cadbury's India Limited

2. Nestle India

3. The Gujarat Co-operative Milk Marketing Federation (GCMMF) - AMUL

4. Cocoa Manufactures and Processors Co-operative (CAMPCO)

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CADBURY’S INDIA LIMITED

Cadbury has been a market leader in the chocolate industry since its day of inception in 1947. The company today employs nearly 2000 people across India.

It is one of the strongest players in the Indian confectionary industry with an estimated 68 per cent value share and 62 per cent volume share of the total chocolate market (www.cadbury india.com) . It has exhibited continuously strong revenue growth of 34 per cent and net profit growth of 24 per cent throughout the 1990's.

It has a huge umbrella of brands like Dairy Milk, Gems, 5 Star, Bournvita, Perk, Celebrations, Bytes, Chocki, Delite and Temptations, there is a huge variety of product range, the company reaches millions of loyal customers. Cadbury has a huge distribution network of 5.5 lakhs outlets across the country .

NESTLE Nestle is one of the Oldest food manufacturing multinantional in INDIA with its presence of over a centuryThis Swiss based food MNC has been in India for 90 years, with six manufacturing plants, and almost $500 million in sales in 2002.

Nestle diversifies in various segments such as Baby Food, Milk products, Beverages (Coffee, malted beverage), Chocolates & confectionery and other processed food products.Chocolates contributes to around 14% to Nestlé’s annual turnover(food industry survey of India 2004). Nestle is the fastest growing company in chocolates in India. The Kit- kat brand is the largest selling chocolate brand in the world. Other brands include Milky Bar, Marbles, Crunch, Nestle Rich Dark, Bar-One, Munch etc.

AMUL

Until recent times Amul did not have a huge market share and was characterized by unattractive packaging and sloppy distribution. However the market share has been improving from 5-8% (food industry survey of India 2004) due to better advertisement and improved packaging.

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SWOT ANALYSIS

MARKETING OBJECTIVE:-

STRATEGIC THRUST

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The key strategic thrust is explained by the following diagrams

The BCG MATRIX clearly indicates the situation of chocolate industry in India. The Industry as seen through this matrix has a good market growth .It has a huge potential since the chocolate industry is estimated to grow at a significant positive rate every year with a considerable huge market share of the complete food industry.

We at D’s Chocolate plan to enter the industry at the stage somewhere between the QUESTION MARK AND STARS and achieve a position with large market share and growth rate through various marketing strategies stated below

http://www.how-do-you-network-for-growth/

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D’s Chocolate is focusing on a NEW MARKET DEVELOPMENT with existing products. Hence at this stage the following aspects are focused at

1. RESEARCH AND DEVELOPMENT2. COMPLETE STUDY OF CURRENT MARKET AND COMPETITION3. CUSTOMER NEED ANALYSIS4. FINDING THE GAPS5. FOCUSSED TARGETTING ON THOSE GAPS6. ENTER WITH A BANG7. WIDESPREAD DISTRIBUTION

CORE STRATEGY

D’s Chocolate has been a west established global brand in SOUTH AFRICA, AUSTRALIA AND NEW ZEALAND for the past 67 years. It has a huge and credible brand image based on high variety of Quality chocolate products belonging to various categories.With the huge potential available in various other markets all over globally, D’s Chocolates is looking to expand into the Indian Confectionary Industry.The following core strategy is being undertaken

SEGMENTATION

Identifying the correct segment in order to focus is one of the key components of any core strategyD’s Chocolate belongs to the confectionary industry, here the demographic segmentation on the basis of age/sex is quite transparent. Hence the other forms of segmentation that can be done can be done on the basis of

A DETAILED PERCEPTUAL MAPS OF THE TWO SEGMENTS SO FOCUSSED BY D’s Chocolates in India are:-

HIGH PRICE

LOW QUALITY

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MARKET 1

MARKET 2

HIGH QUALITY

LOW PRICE

SOCIAL CULTURAL FACTORS

D’s Chocolates is focused on tapping two major marketsa. The Urban quality, health and variety focused consumer(MARKET 1)b. The Rural Price Sensitive Consumer(MARKET 2)

GEOGRAPHIC FACTORS

Distribution forms the most important part of the strategy. A well widespread distribution network with wide and far reaching inventory management system is extremely crucial since the product is perishable and resources are limited, especially in rural market

TARGETTING AND POSITIONING

The focus segments targeted and the products so positioned are as follows

D’s Chocolates will be targeting in two key markets

MARKET 1

URBAN HEALTH SENSITIVE MARKET

The Urban chocolate market comprises of as high as 15% penetration levels (Ministry of Food Processing, Government of India). However, though the penetration levels are high, so is the competition. Hence in order to beat the competition, our products will be targeting at the HEALTH SEGMENT where in those products will be devised which provide a huge variety of HEALTHY CHOCOLATE PRODUCTS which are LOW ON CALORIES CONTENT AND ARE SUGAR FREE BUT WITH THE SAME TASTE AS A NORMAL CHOCOLATE BARHence this chocolate product will give taste, health and variety options to the urban market

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D’s Chocolate….healthy option!Image source:- www.facts-about-chocolate.com/images/healthy-chocolate.jpg

Market 2

This segment will be targeting on mostly on rural customers which are price sensitive and are characterized by lack of infrastructure to store a perishable product such as chocolate.This segment will be touched by affordable basic chocolate products with attractive packaging and pricing. Trade tactics can also be employed here

COMPETITIVE ADVANTAGE AND STRATEGIES

KEY COMPETITORS

The key competitors for us are CADBURY AND NESTLE due to their wide range of distribution and foothold in the chocolate industry.Cadbury has a widespread reach and high Brand Equity due to which they pose a direct competition to our products on areas of customer loyalty. Nestle on the other hand has a huge distribution network and some of it’s products such as KIT-KAT are extremely popular.COMPETTETIVE STRATEGIESThe following strategies will be employed by our company:-

1. NEW SEGMENT-HEALTH

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Source of data:- FDI SURVEY, 2004Not many products are available in the market that directly focuses on the health aspect of chocolates. Healthy chocolate bar which assures of same taste as that of a normal chocolate bar will help attract not only the young urban population but also the huge diabetic population which avoids the consumption of a normal chocolate bar due to it’s sugar content

2. TRADE PUSH

For Market 2, it’s extremely necessary that the distribution network sits right. This can be achieved through modern inventory management systems, lean and six sigma technology. Also distributors can be taken into confidence by divulging into TRADE PUSH which includes refrigeration assistance, large trade margins, counter space provision etc.

MARKETING MIX DECISION

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CONCLUSION

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With the dynamic nature of the consumer needs and perception, constant gaps keep on emerging hence providing opportunities for a new product and segment in an existing market. With the advent of new technologies and globalization, the chocolate industry is getting a whole new dimension with new market penetration opportunities, especially in developing nations such as INDIA. D’s Chocolate can cater and exploit such opportunities in order to establish it’s foothold in the Indian Chocolate Industry. In the report two market opportunities are cited through a thorough analysis of the complete industry and both macro and micro levels. The urban sector has a huge potential in the health segment and a variety of products can be provided to the consumer in this segment. The other potential market is that of rural market which has extremely low levels of market penetration and a huge customer base which is untouched till now. Various methods to cater to these markets are explained above with a positive future ahead for D’s Chocolate’s market penetration

REFRENCES

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BOOKS

KOTLER-PRINCIPLES OF MARKETING

CHRIS FILL - MARKETING COMMUNICATION

INTERNET

http://www.google.co.in/images?hl=en&q=ansoff+matrix&um=1&ie=UTF-8&source=univ&ei=H7p2TMG6Fc6rca2ZxZ0G&sa=X&oi=image_result_group&ct=title&resnum=4&ved=0CDcQsAQwAw&biw=1280&bih=630

http://www.maxi-pedia.com/BCG+matrix+model

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1120857

http://papers.ssrn.com

http://www.allfreeessays.com/login.php?save_page=%2Fessays%2FChocolate-Industry-In-India%2F43913.html

http://www.google.co.in/imgres?imgurl=http://www.marketingteacher.com/image/content/environment.gif&imgrefurl=http://www.marketingteacher.com/lesson-store/lesson-marketing-environment.htmlw

http://www.google.co.in/#hl=en&q=chocolate+industry+india+analysis+&aq=f&aqi=&aql=&oq=chocolate+industry+india+analysis+&gs_rfai=&fp=1bdd5d5e97595c3d

http://www.google.co.in/#hl=en&source=hp&q=chocolate+industry+in+india&aq=0s&aqi=g-s1g-sx8g-msx1&aql=&oq=choclate+industry+in&gs_rfai=&fp=1bdd5d5e97595c3d

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