Executive Summary
The market is incredibly attractive because of access to necessary resources. Franchising is a selected mode of entry in this case. A line of chocolate bars is proposed. Significant product-line adaptations will not be needed, and this aspect will be controlled by Cadbury. A use of TV commercials and social media are suggested as primary tools of promotion.
Introduction
The primary goal of this report is to provide all the necessary information regarding a business proposal on the territory of Tanzania. The country has been developing at rapid rates and the demand for quality products is incredibly high. Moreover, companies have access to enormous amounts of resources that are not fully utilized. The chocolate industry is especially fascinating because the number of firms that operate in this sector is relatively small. Finke (2010) suggests that the problem is that most cocoa beans are transported overseas, and the industry is dominated by Westerners. Meissner (2012) thinks that it should be viewed as an outstanding opportunity to open up a business in Tanzania, and it would be beneficial to a company that has enormous experience in this area.
Cadbury has access to all the necessary tools and instruments that can be used to ensure that the process is successful, and business is profitable. Furthermore, it is important to analyze the situation in the country to get a better understanding of its unique aspects and how they may be utilized to improve the efficiency of operations. One of the most significant advantages that Cadbury has is its production techniques, and the company is likely to adapt. Bienen (2015) believes that many enterprises are too worried about such aspects as the climate, and they think that it may complicate the process of production. Furthermore, this indicates that it would be necessary to build a set of facilities with this aspect taken into consideration. The number of freezers even in the most developed cities is limited, and it would be beneficial to establish long-term relationships with supermarkets and shops in this region and provide them with a broad range of benefits.
Lofchie (2014) argues that another issue that should not be overlooked is that an enormous percentage of the population prefers products that were produced by natives. Moreover, it would be wise to conduct a marketing program that would be focused on benefits of this product and explain why this brand can be trusted. It is paramount to understand that consideration of cultural aspects is vital in this case. The problem is that an enormous percentage of the population does not have access to information and are primarily focused on agriculture. Also, many individuals do not like innovations and prefer traditional approaches. However, there have been many businesses that were successful over the years. The role of social responsibility also has been increasing, and it should be viewed as an excellent opportunity to provide people in this area with work and support. Another issue that needs to be discussed is economic freedom. The situation has been improving, but it is entirely possible that it will have an impact on the ability of individuals to make purchases. Overall, GDP growth that has been shown is enormous, and it is expected that the situation is going to improve in the future. Also, the inflation is not as a significant problem as it used to be and it has stabilized recently.
Market Audit and Competitive Market Analysis
Product Evaluation
The product will be perceived as innovative by target market because of unique packaging, and a variety of tastes is also a significant advantage. However, it may not be viewed as compatible with the current behavior of consumers because they prefer products that are not that flashy most of the time. There would be no difficulties with a use of this product in most cases. Stufflebeam et al. (2014) suggest that trialability should be considered in this case, and it is entirely possible that some types of products will have to be excluded. The level of observability is also significant, and a lot of individuals will be able to see the impact of this innovation. Venuvinod (2011) thinks that It is not possible that there would be any risks related to bad experience because the product has been tested. However, it is possible that some sellers will not consider such factors as the need to monitor the temperature, and it may lead to unpleasant situations. Moreover, the firm should devote significant attention to this aspect to ensure that the number of such cases is limited. The biggest problem that may occur is that the product will be met with negative reaction, and it would be reasonable to present the company as socially responsible. Hopkins (2012) believes that it would be important to participate in a range of activities that would help to protect the environment. Another aspect that is worth mentioning is that the company can be quite flexible and is willing to make changes if it is necessary.
The Market
Geographic Regions
The product will be sold in the territory of Tanzania because it is a region that has captured the interest of many tourists. Mayallah (2014) argues that it will be possible to establish long-term relationships with Kenya because it is interested in Tanzanian products and is willing to invest enormous amounts of funds into the transportation. Moreover, it is entirely possible that the business will be able to expand, and the products will be delivered to nearby countries.
Transportation and Communication
It is necessary to mention that all of the standard tools of transportation can be used in the country. The sector is well-developed, and it is not likely that any significant issues will occur. African Development Bank (2013) suggests that resources may be transported with a use of vehicles or shipping. Moreover, use of railways may also be considered. Such communication tools as the Internet and cell phones are available in the region.
Buying Habits
It is imperative to mention that the consumption of such products has been increasing, and customers prefer to stay loyal to one brand. Sanchez (2014) states that expatriates and people with high income prefer supermarkets most of the time. The population likes products that are simple and only make purchases from trusted sources.
Distribution
Numerous outlets are operating on the territory of the country, and it would be beneficial to consider and exclusive contract with selected few. Mayallah (2014) thinks that Nakumatt should be viewed as an outstanding choice because it has connections with Kenya and it is entirely possible that a relationship with this company would help to promote the product.
Compare and Contrast
Competitor’s Product
One of the primary competitors is Chocolate Mamas. Reuters (2015) describes it as an organic chocolate that is positioned as hundred percent African. Packaging is relatively simple and cheap, but it is well-designed and attracts customers.
Competitor’s Prices
The products that are offered by the competitor are sold at premium prices in shops and hotels that are aimed at people with high earnings. Moreover, it is sold for approximately ten thousand Tanzanian shillings. Fifield (2012) argues that it should be viewed as a significant advantage by Cadbury because the company provides products that are much cheaper.
Competitor’s Promotion
A competitor company has a well-developed website that has all the necessary information. Also, the company is utilizing social media such as Facebook to promote its products. However, it is evident that the firm does not devote enough attention to advertisements, but it is planning to expand in other regions so it is entirely possible that a marketing campaign will be initiated.
Competitor’s Distribution Channels
Chocolate Mamas (2016) describes itself as a relatively small firm, but it has established connections with all the biggest outlets on the territory of Dar es Salaam and now sells its products in Zanzibar and Arusha.
Market Size
Industry Sales
It is necessary to note that the market is not yet well-developed, and it is entirely possible that the company will have to take some risks. 4-Traders (2016) states that there have been two million fair trade chocolate bars sold during the last year according to the statistics.
Company Sales
Moreover, it is expected that the demand is going to increase significantly, and the firm expects to gain at least 1 million in sales thanks to a well-developed marketing campaign and innovative approach.
Government Participation
Agencies
Regus (2015) suggests that is an outstanding choice because it is a firm that has enormous experience in this industry and has helped a lot of companies to deal with some of the most common issues. Moreover, the company will be able to provide consultations regarding all critical aspects, and it has locations in close to 120 countries.
Regulations
The company will have to go through a range of procedures. For instance, it is necessary to get a license, and immigration may also be quite problematic in some cases. Embassy of Tanzania (n.d.) suggests that rights of employees are also actively protected, and minority investors are also protected.
Preliminary Marketing Plan
Mode of Entry
Peng (2010) believes that franchising is a reasonable choice in this case because it will be viewed as a significant advantage over competitors. The biggest benefit is that Cadbury is a brand name that is known all over the world, and an enormous percentage of the target market is expatriates. Reinert (2011) states that the focus on tourists is also critical because they would prefer to buy a reliable product while on the territory of the country.
Marketing Objectives
The product will be aimed at expatriates, tourists, and upper class. Kabwe (2013) argues that the problem is that numerous social issues are present in the country, and many people would prefer to minimize expenses on other goods. The company is expected to make significant profits and gain an excellent position in the market.
Product Adaptations
How et al. (2014) state that the fact that the trademark is known all over the world is a benefit that needs to be utilized. Moreover, it is not likely that any changes will be required. Packaging needs to be redesigned to provide customers with all the necessary information about the components in their native languages. A product line will consist of three type of chocolate, and it can be expanded in the future depending on the situation in the market. Pride et al. (2010) suggest that the product will be easy to recognize thanks to unique packaging, and the company will try to differentiate the goods from those offered by competitors.
Promoting Strategy
TV commercials will be necessary in this case. Iacobucci (2014) thinks that such tools as social media can be utilized to advertise the company and a broad range of products. Richter (2012) believes that the primary objective of promotional activities is to draw attention to the product and to ensure that consumers have an understanding of its benefits. Moreover, it would help to get an enormous competitive advantage. Kaynak (2013) argues that a global campaign should be preferred in this case because the product must be popularized all over the region.
Distribution Strategy
The approach that has been selected will be focused on the delivery of products from the manufacturer to retailers, and to consumers after that. Dent (2011) notes that this strategy is appropriate in this case because relationships with brokers and distributor may be complicated because of such factors as the need to keep products under particular temperature, and it is not likely that many of them would be willing to buy freezers. Brady (2014) believes that partners should be provided with a broad range of benefits because long-term relationships would be valuable. Issues with counterfeit products are not expected.
Pricing Strategy
Expenses on shipment and transportation will be minimized because the product will be produced on the territory of Tanzania, and there is access to enormous amounts of resources. Shipping and transportation are relatively cheap in the country, and it will not have a significant impact on the cost of the product, and price. Majaro (2013 ) mentions that the demand for such products is incredibly high, but it is entirely possible that the pricing strategy may have to be altered if new competitors appear or market situation changes. Boone et al. (2014) think that the number of competitors is rather limited so it will be beneficial to set a low starting price. Moreover, it can be increased in the future if the firm will be able to establish a following and develop relationships with consumers.
The government of Tanzania has several limitations that could affect the pricing strategy because it is focused on the support of the national economy. U.S. Department of State (2013) suggests that Tanzania is determined to ensure that firms have equal opportunities, and it is entirely possible that the company would not be able to take advantage of all the resources that are available. It is imperative to mention that the exchange rate has been unstable lately. However, it can be viewed as a benefit, and it will be capable of getting significant profits in the territory of the country. Also, there are no limitations on cash transfers, and it should be viewed as an enormous advantage in this case. The product will be positioned as an affordable chocolate that is primarily aimed at expatriates, tourists, and upper class.
Conclusion
In conclusion, it is evident that this proposal has a range of benefits that should not be overlooked. One of the most significant advantages is that the company is quite experienced in this industry, and numerous marketing strategies have already been developed. Moreover, it is not necessary to develop new advertisements, and promotion techniques have proven to be effective. However, numerous barriers are still present. Many companies that are focused on the production of chocolate have been hesitant about business in this area because of the economic situation and prefer other approaches.
References
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