Background

Chokolada is an emerging chocolate business in Sydney, Australia that aims to expand its enterprise to other prominent Australian cities and towns. At present, Chokolada caters to a clientele that comprises of school and college going students and early career professionals. A key feature of the services provided by Chokolada is that it gives its customers an extensive range of exotic drinking chocolate beverages to choose from. Those fond of drinking chocolate can select from a wide variety of French and Swiss hot chocolate drinks when they visit Chokolada. Chokolada takes a lot of pride in the quality of the chocolate that it produces, seldom giving its customers any reason to complain about the chocolate that they drink or the confectionaries that they eat at any of its stores. Every care is taken on the part of the store authorities to sell chocolate that has been well examined and supervised prior to being distributed to customers. This chocolate business in Sydney also provides its customers with a carefree and informal ambience to interact in and it has turned out to be quite an attractive hangout destination for the youth in Sydney. People love to come to these stores and spend hours talking to one another, just like they would do at a café or a bistro.  Based on detailed situational and marketing analysis, a marketing plan for Chokolada shall be drawn up using which it can successfully expand and establish its presence in other Australian locations, and ultimately based on how it performs here, in foreign shores.

1. Political Environment – The political environment in Australia is one that is relatively stable and is certainly conducive for business growth and development. Australia serves as a very crucial market for multi-national corporations as far as the Asia Pacific region is concerned. The Australian political system can readily respond to economic challenges. There is a strong checks and balances system in place and the country also has a much respected law enforcement and judicial system in place, that provides investors foreign as well as local with a climate of security in which to conduct business in. (Austrade.gov.au, 2018). As a result the Chokolada enterprise has been able to run in its operations in a smooth and efficient manner. It has not run into difficulties with local administration and is not an enterprise that is viewed with skepticism or distrust by political authorities in Sydney.

Situation Analysis

2. Economic Environment – The economic growth rates in Australia tend to be a lot higher than that of most OECD countries like the UK and the USA (“Australian economy | Business | The Guardian”, 2018). The country’s GDP growth rate in particular is as high as $ 1.1 trillion and the growth rate of 2.5% has made the economic environment of the country secure and stable (Solomon, 2014). Exchange rates are on the rise, interest rates are moderate, employment levels are relatively high and the rate of inflation is very low (Reserve Bank of Australia, 2018). The terrific economic growth in Australia and the stable business environment has really enabled Chokolada as an enterprise to thrive and prosper upon conducting its operations in Sydney.

3. Socio-Cultural Environment – There are three primary classes of people existing in the country of Australia namely the upper class, the middle class and the working class. Wealth is determined through the ownership of property and capital. The middle class in Australia is comprised of people who are engaged in non-manual professions such as engineering, law, medicine, computing and accounting. The working class comprises manual workers only. Australian society is quite diverse in nature with people of different ethnic groups residing in peace and harmony over here. English is the language that is used for communication and the country has no official religion either. Education is regarded as compulsory for most Australians and higher education is greatly pursued by those on the lookout for the best employment opportunities. Tertiary education is also something that is made quite easily available in Australia and is mostly provided by technical institutes and universities or institutes that specialize in the provision of adult continuing education (Myaccount.news.com.au, 2018). The excellent socio-cultural environment in Australia has enabled Chokolada to target an ethical and prosperous customer base, with most of its clients being well to do middle income individuals.

4. Technological Environment – Science and technology policy in Australia is dominated by a number of important issues. Research and development work concerning technology mostly takes place at nationalized research centers. There is effective communication between the government and the industry. A good deal of tension is seen to exist between researchers at the University level over the government allocation of funds for researching on technological areas and the industry is seen to play a crucial role in supporting technological research. Australia is seen to play a key role in science and technological collaborations at the international level. Various advancements are seen to take place in technology in Australia that has resulted in new and improved approaches to marketing and marketing communication. Companies in Australia are well positioned to use such advancements in order to innovate and improve upon their special brands and products (Industry.gov.au, 2018).

PESTLE Analysis

5. Legal Environment – Property laws in Australia are very stringent and have played quite a crucial role as far as the reduction of corruption is concerned. The taxation system in Australia is quite a favorable one especially as far as nonprofit organizations are concerned, with NGO’s enjoying benefits like tax concessions, tax exemptions and tax deduction certificates (Alrc.gov.au, 2018). Chokolada while running its business has not been slapped with unfair trade regulations, legal notices or burdened with unfair taxes.

6. Environmental Factors – Natural resources in Australia are on the decline. The challenge of global warming is also something that the Australian population is faced with, compelling many to adopt eco-friendly lifestyles or mode of living (Nationalgeographic.com, 2018). Since Chokolada adopts environment friendly means to manufacture and distribute chocolate, it is able to target a customer base that is entirely in favor of eco friendly living. All the people in Australia who are fond of drinking chocolate and eating chocolates and who believe in environmental sustainability certainly feel inclined to patronize the Chokolada stores because of their approach towards environmental conservation.

1. Strengths – Chokolada is a chocolate business that provides its customers with a relaxing environment in which to sip coffee in when visiting any of its stores. Every effort is made to make sure that the music played in the background during business hours is soothing and gentle to the ears and not loud and jarring. The stores operating under Chokolada also specialize in the timely rendition of services and customers never have to wait for more than five to seven minutes for drinking chocolate, conventional chocolate or any confectionary that they might order along with it. Particular care is taken regarding the quality of chocolate products and confectionaries that are made available to customers. Customers will find little or no reason to complain about the solid chocolate or the hot chocolate that they buy from any of Chokolada’s stores.

2. Weaknesses – The ingredients used for making drinking chocolate and other confectionaries are quite basic and not as sophisticated or exotic as those used in other upscale confectionaries and chocolate stores in Sydney. Those on the lookout for solid or liquid chocolate that tastes highly exquisite or unique may not get what they are looking for when they arrive at Chokolada. While efforts are always in place to ensure that customers do not fall ill or find any distaste when consuming any chocolate at the Chokolada stores, that taste of uniqueness that one finds when eating imported chocolates or branded chocolates is something that is usually missing from the Chokolada products.

Opportunities – Almost everyone these days is fond of eating chocolates and drinking hot chocolate. The youth, especially those still pursuing their education and those who have newly started earning are often looking for places in the city where they can relax and unwind with likeminded friends and peers. The Chokolada business plans to expand its operations to a location where it can easily access its target customer base. People looking for an affordable but comfortable place that plays good music and which serves hot chocolate and confectionaries will most definitely be interested in patronizing such a chocolate store. For such people, visiting such a store will give them the opportunities to unwind and relax with their friends and loved ones without spending as much as they would have had to had they gone over to an upscale bistro in town (Johnston & Bate, 2013).

Threats – Chocolate stores are opening dime a dozen in most of the prominent Australian cities and towns. Chokolada is therefore more than likely to face the threat of competition from other similar stores and bistros in the location that it expands its business to. Pricing can prove to be a tricky affair. Customers are likely to prefer confectionary stores that serve inexpensive but delicious hot chocolate. The existence of such a chocolate store can pose as a huge threat to Chokolada, which may find it quite difficult to serve exotic and sumptuous drinking chocolate, confectionaries and different varieties of solid chocolate at too low a rate. While such stores do not really last in the market for too long a period of time if they continue to serve sumptuous chocolate at low rates, they can for a certain period of time attract business away from the Chokolada stores.

Expenses are certain to be a major area of concern for Chokolada. The production of high quality chocolate can only be feasible if a substantive amount of money is invested in its manufacture. Yet by keeping the price of chocolate low and affordable, the business won’t be able to incur as much profit as needed to meet overhead costs, at least at the initial stages of its operation in the new location of enterprise. Since the enterprise, authorities will have to engage in the recruitment of new staff for the stores in the new business location, a smooth and efficient rendition of services is something that cannot be easily guaranteed at the outset of business operations in the new business locations. It will take some time for the new staff that is recruited to understand the nature of the business, client demands and thus carry out operations for the Chokolada stores accordingly (Donovan et al, 2014).

• To get as many new customers as possible
• To retain all existing customers
• To establish a faithful and regular clientele

• To start generating profits right from the very first month of business in the new location
• To maintain a high gross margin of approximately sixty to seventy percent
• To incur enough revenue for investing in the manufacture of high quality chocolate, both drinking chocolate and solid chocolates. 

Chokolada is a business that shall cater to customers aged between sixteen and forty years, both male and female. Customers do not need to belong to a high income or an excellent economic background in order to purchase chocolate from any of Chokolada’s stores. Discounts and rebate coupons shall be provided to those who are seen to regularly patronize the chocolate stores. (Newton etal., 2013). The discount and the rebate coupons will put customers in a position to avail rebates ranging between ten percent and thirty percent on Chokolada’s products. Regular customers at the Chokolada stores will thus be able to save some money when patronizing the stores, thus giving them every incentive to keep patronizing the business for as long as possible (Wilkinson, 2013).

Based on the theory of competitive advantage, in order to clearly distinguish this chocolate from other similar outlets in the new location, the Chokolada stores shall create an ambience centered around rock music (Wang, 2014). Photos of erstwhile Rock Music icons like Jim Morrison, Jimi Hendrix and Elvis Presley among others, will adorn the walls of the stores. This will allow customers to gaze at their favorite rock idols while listening to some of the trendiest rock tunes that play in the background (Urde and Koch, 2014).

A jukebox system of playing music shall be put in place at the store for the benefit of customers who are especially likely to visit Chokolada stores for listening to music while enjoying some delicious chocolates. This jukebox will enable customers to select their favorite tunes, which will then be played in succession for their enjoyment at the store (Ridder et al, 2014).

1. Product – The products sold will comprise of high quality hot chocolate, solid chocolates and a variety of confectionaries. Customers can get to choose from not only the regular bitter chocolate, milk chocolate and chocolates with nuts but also an extensive variety of candied popcorn, candied nuts, glazed fruits, marshmallows and liquorice (Helm and Gritsch, 2014).
2. Place of Distribution – Distribution of chocolates through the stores shall be conducted in the city or town where the new stores of the Chokolada business are opened, especially in and around the localities where the stores are set up (Eshuis etal., 2014).
3. Price – The initial price of a hot chocolate or any standard drinking chocolate at Chokolada will be set at $ 2. Special concoctions and even imported solid chocolates and confectionaries will be priced at just $ 10 and $ 15 per item (Khan, 2014). While there is a certain risk associated with low pricing strategies, especially if the business is to be sustained in the new locations over the long term, it is hoped that the low price will have a very important role to play in attracting as many customers to the Chokolada business as possible as soon as it starts in operations in the new business locations (Ingenbleek et al, 2013).
4. Promotion – Promotional activities will be carried out on social media platforms such as Facebook, Twitter, Youtube.com and Instagram. Leaflets about this chocolate business’ expansion will also be handed over and distributed at shopping malls and grocery stores in the new cities where the café is opened (Andreti, 2013). Since social media is widely used by customers of every age group, it is hoped that the extensive use of social media will be a useful role in disseminating the news about Chokolada’s business expansion quite easy. People will get to know about Chokolada’s business operations in cities and towns of Australia apart from Sydney by simply logging into their accounts on Youtube, Twitter and Facebook (Mikalef et al, 2013).

Source – As created by the author

Source – As created by the author

References

Andreti, J., Zhafira, N. H., Akmal, S. S., & Kumar, S. (2013). The analysis of product, price, place, promotion and service quality on customers’ buying decision of Convenience Store: A survey of young adult in Bekasi, West Java, Indonesia. International Journal of Advances in Management and Economics, 2(6), 72-78.

Australia’s Dry Run. (2018). Retrieved from https://www.nationalgeographic.com/magazine/2009/04/murray-darling/

Australian economy | Business | The Guardian. (2018). Retrieved from https://www.theguardian.com/business/australia-economy

Australia’s enabling technologies capability. (2018). Retrieved from https://industry.gov.au/industry/IndustrySectors/nanotechnology/AustraliasEnablingTechnologiesCapability/Pages/default.aspx

Business – Austrade. (2018). Retrieved from https://www.austrade.gov.au/International/Invest/Why-Australia/Business

D. Newton, J., J. Newton, F., Turk, T., & T. Ewing, M. (2013). Ethical evaluation of audience segmentation in social marketing. European Journal of Marketing, 47(9), 1421-1438

Dailytelegraph.com.au | Subscribe to The Daily Telegraph for exclusive stories. (2018). Retrieved from https://myaccount.news.com.au/sites/dailytelegraph/subscribe.html?sourceCode=DTWEB_WRE170_a_GGL&mode=premium&dest=https%3A%2F%2Fwww.dailytelegraph.com.au%2Fentertainment%2Fsydney-confidential%2Fabc-survey-is-dividing-australians-by-social-class-based-on-their-habits%2Fnews-story%2Fa2099ab572b77293e5c4081d69442d8b%3Fnk%3Deea9ea36d68b6afc3d75f165796da863-1529057154&memtype=anonymous&v21=cta-jt&v21suffix=cta-jt

Donovan, J. L., Paramasivan, S., de Salis, I., & Toerien, M. (2014). Clear obstacles and hidden challenges: understanding recruiter perspectives in six pragmatic randomised controlled trials. Trials, 15(1), 5

Economic Outlook | Statement on Monetary Policy – May 2017 | RBA. (2018). Retrieved from https://www.rba.gov.au/publications/smp/2017/may/economic-outlook.html

Eshuis, J., Klijn, E. H., & Braun, E. (2014). Place marketing and citizen participation: branding as strategy to address the emotional dimension of policy making?. International review of administrative sciences, 80(1), 151-171.

Helm, R., & Gritsch, S. (2014). Examining the influence of uncertainty on marketing mix strategy elements in emerging business to business export-markets. International Business Review, 23(2), 418-428.

Ingenbleek, P. T., Frambach, R. T., & Verhallen, T. M. (2013). Best practices for new product pricing: impact on market performance and price level under different conditions. Journal of Product Innovation Management, 30(3), 560-573

Johnston, R. E., & Bate, J. D. (2013). The power of strategy innovation: a new way of linking creativity and strategic planning to discover great business opportunities. AMACOM Div American Mgmt Assn

Khan, M. T. (2014). The concept of’marketing mix’and its elements (a conceptual review paper). International journal of information, business and management, 6(2), 95.

Mikalef, P., Giannakos, M., & Pateli, A. (2013). Shopping and word-of-mouth intentions on social media. Journal of theoretical and applied electronic commerce research, 8(1), 17-34.

Ridder, H. G., Hoon, C., & McCandless Baluch, A. (2014). Entering a dialogue: Positioning case study findings towards theory. British Journal of Management, 25(2), 373-387

Solomon, M.R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). Upper Saddle River, NJ: Prentice Hall.

The common law and private property | ALRC. (2018). Retrieved from https://www.alrc.gov.au/publications/common-law-and-private-property-0

Urde, M., & Koch, C. (2014). Market and brand-oriented schools of positioning. Journal of Product & Brand Management, 23(7), 478-490.

Wang, H. L. (2014). Theories for competitive advantage.

Wilkinson, F. (Ed.). (2013). The dynamics of labour market segmentation. Elsevier.