Executive summary
This report presents marketing mix that Rose Chocolatier will use in Brazil confectionery market as its target market. The company must use its marketing mix strategy with the price as the determining factor upon which other elements of marketing mix depend.
Rose Chocolatier must recognise that Brazil is an emerging economy with most middle-class consumers; thus, its prices, products, and promotion strategies will appeal to such consumers.
The company must also take into account factors related to potential risks and benefits when venturing into foreign markets. This means that all decisions must be of significant consequences as foreign markets are different from domestic markets.
Product and target market description
Rose Chocolatier has many varieties of dark chocolates made from finest organic and natural ingredients. The company has hand-dipped and moulded chocolate that are fresh and flavoured.
The company has fresh chocolates daily. Some of the chocolate varieties Rose Chocolatier has include dark chocolate bark, milk chocolate bark, Pecan Toffee, Traditional Caramels, Hazelnut Gianduja, Dark Chocolate Ganache, White Chocolate with Lemon, Dark Chocolate with Scotch, and the Gift Baskets that consist of barks, toffee, peppermint bark, and truffles (Rose Chocolatier, 2012).
Rose Chocolatier intends to venture into the international market with Brazil has the target market. Brazil is among the world’s emerging economies and consumptions of luxury products are on the rise.
Brazil chocolate market has a wide range of consumers in which consumers below the age of 14 years accounted for 36.8 percent of confectionery consumption during the year 2008. Specifically, this age group accounts for 38.1 percent of the total chocolate consumed in the same period. Still, urban consumers are the highest consumers of chocolate products at 87.6 percent in the year 2008.
Redruello notes “strong economic growth and increasing prices of export commodities have enhanced Brazilian consumers’ confidence” (Redruello, 2011). Consequently, confectionery industry has grown as demands for high added value luxuries have increased (Redruello, 2011). According to Euromonitor International, the industry experienced a growth of two percent in the retail sector in 2010. In addition, retail sales increased by seven percent from the year 2009 representing a growth of US $ 9.7 billion.
Brazil mainly depends on exports to the EU zones. The trends show that the country’s export market is growing. Rose Chocolatier will find it cheap to use Brazilian sugar in its chocolate products than import from Australia. Brazil also has high birth rate. This is a factor responsible for the growth of confectionery industry.
In 2010, the chocolate industry grew by 17 percent. This occurred due to favourable macroeconomic factors such as increased employment opportunities, growth in the GDP and increased industrial activities. In Brazil, Easter periods are also the best time to increase sales of gift chocolate baskets.
In the year 2010, the sales increased by 20 percent compared to the previous year. Still, boxed assortments and gift baskets are the largest and fast moving chocolate products. They accounted for “36 percent of the year’s sale, representing 30 percent of the total revenue” (Redruello, 2011).
Brazil chocolate manufacturers such as Ferrero have established that they can increase their sales by offering varieties. Thus, the company launch many varieties in 2009 such as Ferroro Rondnoir and Ferroro Garden Coco. In addition, there is also the exisiting Ferroro Rocher Line (Redruello, 2011).
Kraft Foods also launched additional two packs under the popular bonbons of the Sonho de Vala brand. This brand mainly targets children because the product is a folding carton consisting attractive designs of heart shape.
The aims of these new brands were to add value to consumers and provide competitive strategies in a market dominated by premium brands. The strategies mainly focused on “capturing the market share of gift segment and standard boxed assortments” (Redruello, 2011).
There are also confectionery products that can substitute chocolates. This segment of products also grew considerably. Sugar confectionery also increased by 5 percent in the year 2010. This was due to rising sugar products prices. Caramels, toffees, and nougat also increased their sales volume in the same period. The industry attributed this to “rising costs of sugar products and due to the increase of share premium in the leading toffees company, Arcor” (Redruello, 2011). This enhanced strong value growth by 10 percent.
Cadbury Adams launched a “new value-added gum confectionery under its leading brand of Trident in the period of 2009” (Redruello, 2011). Cadbury Adams first launched this product in Brazil in 2009 before taking it to any other country. This shows how Brazil confectionery market is growing rapidly amidst competition. In addition, the company launched other products such as Trident Total. This product aimed at appealing to consumers’ oral health, and it has protein ingredients from milk for replacing lost minerals.
Other functional gum products also increased their sales volume by 18 percent. This occurred as a result of activities of Cadbury Adam in their efforts to increase their sales volume in this category. The company managed five percent growth in value share, in 2010. This is the industry environment that Rose Chocolatier will operate.
Product Strategy
Rose Chocolatier can establish its brand in Brazilian market. However, it must recognise that it is neither easy nor cheap as it must fight it out with established giants like Cadbury Adam and Kraft Foods. Thus, it must maintain quality. This implies that its chocolate must have consistency both in the target market and Australia.
At the same time, the company cannot compromise on the administrative and employees compositions that support its brands. It has to recognise that operating in a new market is difficult than in the home market. The company must also estimate the period it will take to establish itself in Brazil market.
Rose Chocolatier has many assortments of dark and milk chocolate products that it can provide in Brazil market. Rose Chocolatier can market assortments of its chocolate and other confectionery products in varied sizes, quality, and in different packages for different consumers. Consumers can buy fresh chocolate products for immediate consumption or takeaway products nicely packaged in Rose Chocolatier branded wrappers.
This is an approach Rose Chocolatier can apply to target its potential buyers in Brazil. Products packaging sends a strong message to customers about the company. Thus, Rose Chocolatier must recognise the importance of packaging in Brazilian market where companies launch innovative products every year.
Packaging approach must attract customers within a limited time to enable the company acquire sales volume and market share. Chocolates packaging offers convenience to consumers who want carry their chocolates, give gifts, or take them on their way home or work. Consumers can purchase chocolate products repeatedly due to packaging offered.
The company has been working on its packaging so as to fit all weather conditions and delivery periods. However, successful companies have realised the need for innovating their packaging methods over the years so as to appeal to consumers for convenience. Rose Chocolatier must also note that all its chocolates are consistent in all its international outlets.
Rose Chocolatier must promise its potential customers that products will maintain their original tastes despite using Brazil sugar or milk. This is necessary in cases where it has to deliver fresh chocolate products on a daily basis.
Rose Chocolatier offers convenience by serving customers high-end products in Australia at competitive prices. This must also apply in Brazil where emerging middle-class consumers expect quality products for their spending. This allows Brazilian consumers expect standard products from the company.
This is important when dealing with deliveries in hot weather and hand-made chocolate products. It is the relationship that Rose Chocolatier will establish through its products that will ensure its success (Kotler, Wong, Saunders and Armstrong, 2005).
Brazil confectionery industry is competitive due to many multinational firms that launch and offer varieties of brands to consumers. In this respect, Rose Chocolatier cannot change its brand, but rather concentrates on delivering quality services in Brazil.
This is because changes at the initial stage before studying consumers’ reactions to new brands may not favour it. Consequently, Rose Chocolatier can distinguish itself through delivering quality services and products. Rose Chocolatier must also work towards enriching its online sales systems for capturing the growing market segments that prefer online purchases and payments.
Rose Chocolatier must choose its retail outlets in Brazil carefully. It must choose place where its products will appeal to the target consumer segments in high-end, middle-class and lower class consumers (Solomon, 2006). Choosing appropriate retail outlets will ensure that the company’s products reach all segments of the targeted consumers. This strategy allows every segment of the market to feel the presence of Rose Chocolatier in Brazil. Ease of access will create demands in competitive confectionery markets of Brazil.
The company has learnt the importance of place and product in Australia. Thus, it must adjust its strategy to fit an emerging economy. Presence of products means ease access to consumers. However, product and its availability must promote Rose Chocolatier international marketing objectives in terms of brand, image, and distribution. Place strategy must ensure that the approach attract busy consumers, high-end consumer, children and other segment that will result into market share increment.
When deciding a place and product strategy, Rose Chocolatier must consider products’ image and prices, and how customer will perceive its products in the chosen locations. Rose Chocolatier has to review Brazil consumer orientations, market changes and competition activities.
This implies that the choice of outlets for its products must counteract competitors’ strategies. Outlets should also appeal to consumers and foreign employees alike. Consumers perceive retail outlets different based on factors that influence their purchasing decisions (Solomon, 2006).
Pricing Strategy
Rose Chocolatier marketing mix strategy should take into account all other marketing mix when deciding on prices. This is because the competitive confectionery industry of Brazil does not favour have any strategy that does not take into account products pricing. Likewise, pricing strategies must also consider costs that the company will incur in cases of deliveries and making calls for confirming clients’ orders and satisfaction.
Usually, such arrangements have consequences on the price, promotion and products distribution and availability. It is the pricing strategy that must determine all other aspects of the marketing mix. Rose Chocolatier must continue providing competitive prices with competitive products just like in Australia.
Thus, marketing mix tends to favour pricing as the determining factor. However, in setting pricing strategy, Rose Chocolatier must remember that pricing alone is not a determining factor for sales volumes and market share. Instead, there are other factors that consumers take into account before making purchases, such as products tastes, quality, and packaging among others (Brassington, and Pettitt, 2005).
Rose Chocolatier cannot put its prices higher than those of Australia because Brazil is an emerging market consisting mainly of middle-class who still mind their spending habits and may stick to the budget; thus, will tend to avoid expensive luxuries.
Rose Chocolatier is selling to all consumers in Australia. The company may target the same segments in Brazil or launch some high-end products for high-end consumers. In this regard, it cannot fail in determining appropriate pricing strategy for emerging economy with a lot fluctuation witnessed during recession.
Pricing strategy will appeal to different customers, particularly where the company targets middle-class consumer. Every consumer would like to experience some after-purchase satisfaction with the product. Pricing strategy must also consider other multinational giants like Kraft Foods and Cadbury Adams, and other competitors.
Brazil confectionery market is among the competitive in the region. Rose Chocolatier must know that it will not be the only company offering unique products to consumers. Pricing strategy must work for the company in capturing market shares, increasing sales volumes, defeating competitors and appealing to all segments of consumers. Thus, it is a decision the company must implement with utmost care.
Rose Chocolatier must also recognise that some consumers are sensitive to high prices and are not likely to purchase their high-end products. This is mainly the lower class. Still, the company must provide varieties for this consumer segment by offering low cost chocolate products and other low cost confectionery items. As most authors put it, it is the pricing strategy that determines all the other Ps of the company marketing mix approaches (Solomon, Marshall and Stuart, 2009).
Promotion Strategy
The company must include promotional strategy for capturing the market attention in a competitive chocolate industry of Brazil. Rose Chocolatier will depend on promotional strategies for creating its brand images and enhancing awareness about its presence in Brazil confectionery market. It must evaluate promotional media available in Brazil that can assist it reach its target market.
In this respect, the company must evaluate how it will reach all segments of consumers using the available tools of communications. Messages must also reflect diverse cultural and socioeconomic statuses of different consumers. The company has many options for promoting its brand. These include its Website, advertising, media channels, direct marketing, and engaging in corporate social responsibilities through sponsoring of events (Berry and Wilson, 2001).
However, in doing all these, it must consider the available resources for marketing communications for establishing the brand. This may take up to three years. Thus, the parent company must support its operations in Brazil.
Rose Chocolatier should engage new social media platform in attracting young consumers. Any communication approach should appeal to the target audience and markets. The communication approach must bring customers and result into purchases. However, it must improve in cases where its messages do not appeal to target audience. Marketing mix is only effective if it results into increased sales and growth in market shares.
There are different marketing communication channels. Rose Chocolatier must ensure that the team implement them in an appropriate manner to reflect what the company stands for in a new market. Thus, there should be no cases of conflicting information, messages, miscommunication, and cultural misrepresentation (Adcock and Halborg, 2004).
Marketing Mix adjustment strategies
Rose Chocolatier must adjust its marketing mix to fit Brazil chocolate market. These are price, product, and promotion. We note the pricing influence on all other elements of the marketing mix (Palmer, 2004). Thus, Rose Chocolatier can only use price strategy in achieving its marketing objectives. For example, the chocolate industry in Brazil is experiencing price competitions and discounts offers on Easter periods. This may aim at attracting a large number of consumers who give gifts during these periods.
Rose Chocolatier should align its pricing with packaging, outlet locations, and promotion decisions so as to realise the value in the target market. The competitive confectionery industry will force the company to focus on pricing, promotion and distribution of its chocolate products, particularly during hot weather. Rose Chocolatier decision to use online channels for retailing chocolate means it must recovery such investments. This enables it to cater for online customers.
Rose Chocolatier marketing mix will adjust to include all marketing mix when deciding prices. The company cannot use a non-price approach in a new market. Products ingredients, whether imported or local, will also affect the price and availability of products. If the company uses local Brazilian sugar and milk, then its prices should reflect such cases.
However, if the company depends on products from Australia, then prices will be slightly higher to reflect importation costs. However, product quality, packaging and availability can only improve for convenience of consumers.
Conclusions & Recommendations
International marketing is increasingly becoming popular among firms. Consequently, they extended their activities outside their home markets. Rose Chocolatier must deal with concerns of marketing entry strategy, improve, or adapt its marketing mix for Brazil market. This must be a crucial decision for the company.
The company’s marketing approaches must aim at satisfying the needs of consumers in Brazil market. The emerging market of Brazil still has a lot of gaps that the company can fill; thus Rose Chocolatier must offer products and services that are attractive and competitive than other competitors’ products and services.
In this case, marketing mix is the alternative for overcoming such concerns. It must also ensure that its marketing mix strategies reflect well its strategic vision of international marketing. It must improve the achievement of both short-term and long-term goals and help drive Rose Chocolatier into the preffered future growth in the global (Johansson, 2009).
However, international marketing is a risky business because of different factors like rates, barriers of trade, protectionist tariffs, and different consumer cultures. These are some of the challenges Rose Chocolatier can meet in Brazil confectionery market. Mixture of gains and risks means a planned approach to decision-making concerning global marketing.
Rose Chocolatier group should incorporate the global market environment into their strategies. It should assess Brazil chocolate market, consumers’ cultures and consumers’ behaviours, then decide to conduct the business with regard to possible risks and benefits.
Reference List
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Berry, T and Wilson, D 2001, On Target: The Book on Marketing Plans, Palo Alto Software Inc, Eugene, OR.
Brassington, F and Pettitt, S 2005, Essentials of Marketing, Pearson Education Limited, Essex.
Johansson, J 2009, Global Marketing: Foreign Entry, Local Marketing, & Global Management, 5th ed, McGraw-Hill/Irwin, New York.
Kotler, P, Wong, V, Saunders, J and Armstrong, G 2005, Principles of Marketing, 4th ed, Pearson Education Limited, Essex.
Palmer, A 2004, Introduction to Marketing, Oxford University Press, Oxford.
Redruello, F 2011, Economic growth boosts confectionery in Brazil. Web.
Rose Chocolatier 2012. Web.
Solomon, M. (2006). Consumer Behavior. New Jersey: Prentice Hall Europe.
Solomon, M., Marshall, G., and Stuart E. (2009). Marketing: Real People, Real Decisions, 1st European Edition. Boston, MA: Pearson Education Ltd.