Market Analysis

 The chocolate market in 2017 stood at 2.9 billion dollars and is predicted to surpass 4.3 billion dollars in 2023. This is because of the growth in the intake of chocolate and the rising demand of different categories of products, for example organic chocolate products. Another reason for the market rise is the increased focus of chocolate manufactures to offer innovative and unique products. This will have a positive influence in the country’s chocolate market in the years to come. There are rising numbers of consumers that want to live a healthy life is causing a demand for the exceptional chocolates and quick increase of e-commerce (TechSci Research 2018). Packaging innovations are another factor that will boost the progression of the chocolate market. During the forecast era, this are other factors that would cause growth in the Australian chocolate market. Salespersons are introducing new premium chocolates in order to differentiate and personalize their chocolate section causing the demand for premium chocolates. The Australian confectionary market is growing at a steady rate but is facing competition from cheap imports. However, the population in Australia is aging and this creates an opportunity for manufactures to introduce confectionery products that cater for age specific requirements. The sale of premium chocolate helps to expand the profit limits because consumers are mainly attracted by packaging, uniqueness, constituents and price.

Macro Environment Analysis

Political stability has an impact on Ferrero because of the value added taxes that the government places on the product. This affects the company in that it has to add the prices of its products and this affects their sales. Prices of raw materials that are used in the production of chocolate and the other products tend to rise due to economic instability. The high and shifting exchange rates enables the country to process its product with a high exchange rate making the chocolate manufactures less expensive compared to the imports. Import of foreign Ferrero products increases the economy of the country. The different cultural products in the country increase competition in the country’s chocolate market (Frolova 2019). The brand’s competition is also on the increase because of health indicators of the Australians. The different and unique mixture of cultures in the country has resulted to new ideas and strategies in the market. Computer technology has impacted the marketing strategies, sales and advertisements of products of the Ferrero products in a positive way. It has enabled research and allowed innovations in the food technology and therefore improving the quality of the products. The transparent legal system in the country allows easy entry of foreign companies in the markets increasing diversity which leads to competition for the company. Ecological issues affect the production of raw material hence affecting the market. This leads to the shortage of raw materials affecting Ferrero market and profits because they are needed to produce the products.

Micro Environment Analysis

Company Analysis

• Ferrero has built a strong name, reputation and image for itself.
• The company has gained a high customer loyalty through their years in producing confectionery.
• The company’s products have an attractive packaging and quality products.

 3 major negatives

• Ferrero Company does not have an online shop.
• The perception by consumers that chocolate and other related products are unhealthy.
• The company does not use the internet for promotion.

Ferrero’s reputation and image is their refection of the company’s values, and their products. This makes their name stand out and their product be preferred compared to others. This has led to customers being loyal throughout the years. The customer’s loyalty has enabled the company experiment with new flavours, products and are certain that they will keep their customers. The packaging of their products is attractive and have quality products meaning that they value their customers (Ferrero 2019). By how they promote and advertise their products, it shows that their main objective is to present quality products. In this day and age, where technology and the internet are the order of the day, the company does not have an online shop. This can negatively affect the image of the company and make it lose its customers. The company prefers advertising through communication with its customers which is a good thing. However the internet would be of great impact for them in terms of advertising considering the day and age. With the new healthy lifestyle trend, consumption of chocolate, candies among others is perceived to be unhealthy hence affecting the company.

Competitor Analysis

The major competitors of Ferrero include, Hershey’s, Kraft Foods, Mars Incorporated, and Nestle Limited. Being that these competitor companies have an established name, they increase competition making it hard to thrive in the industry. Competition leads to the increase of price affecting the consumer chocolate market. It also minimizes the sales and profits in the competitive market. Hershey’s and Ferrero both chocolate brands. Hershey’s is a well-known brand and is more recognized while Ferrero is a much smaller brand and cannot be compared in terms of profits and sales. Hershey’s generates 62 % the revenue of Ferrero. Kraft foods and Ferrero both operate in the food processing industry. Kraft generates $ 13.1 b more revenue compared to Ferrero. Mars is a top competitor of Ferrero and just like Ferrero, it operates in the food industry. Mars has more employees compared to Ferrero (MBA Skool Team 2020) .Hershey’s target market are children and adults from the middle and upper middle class. Their products are chocolate based products and are priced from $ 2.99. Their promotional strategy is through Digital media and engage in online distribution. Their strength and weaknesses respectively are that they among the oldest and largest chocolate manufacturers and have a strong brand name. Extreme competition hence limited market share growth. For Kraft foods, the target market is all age and income groups and deal with confectioneries. The price is $ 5.29, promotional strategies are distribution of circulars, advertisements through radios and newspapers and distribute via traditional retail, food distributors and e-commerce. The strengths include being a market leader in confectionery. Weakness include periods of product recall that have impacted their image. Competitor Mars target market are all age groups from middle and upper middle class families and deal with confectioneries. The price of the product ranges from $ 2.22 and promote through television, media, advertisements, and newspaper and distribute via distributors. Strength and weaknesses include strong supply chain network and strong competition from other companies respectively.

Competitive Market Summary

Consumer Analysis

The consumers of Ferrero products are people from all ages. Nutella is a product that is mostly used by families and the most purchased. Because of the high quality and innovation of the products, transparent communication, promotion of healthy lifestyles and the care for people, the consumers purchase this product. The products presented at Ferrero are all known all over the world with their different brands. (Ferrero 2018). The company has gained its customers loyalty through its quality products. Ferrero produces high quality and fresh products maintaining its customers. To ensure that their customers are satisfied with their products, the company being customer oriented ensure production of quality products throughout the whole manufacturing process starting with the selection of raw materials, processing, to packaging, promotion and marketing. To reach each and every consumer, the company hires a local marketing agency and promote their products in an elegant environment. The company has outlets in Europe, South Africa, North America and Australia where their products are found all over the stores.

SWOT Analysis

The strengths in the SWOT analysis include Ferrero having quality and luxury products which attract and satisfy the consumers. This helps the company gain more customer loyalty leading to more sales. From the attractive packaging and quality products, the products are ideal for gifting. It has a very attractive packaging which makes it unique and helps the consumers recognize it. The weaknesses are that the products are highly priced which is a disadvantage for them (Frolova 2018). Their products are not advertised enough which could help to reach new consumers. Chocolates are perceived to be unhealthy and this makes the company lose its customers. For the opportunities, introducing new products will help the company to improve in market share. Advertising through the internet will help them attract more consumers and improve their brand name. The increase in demand of the three piece impulsive pack will increase their sales. The company’s threats include high competition from other chocolate brands reducing their sales. Other companies are imitating the brand which damages the company’s image and the poor economy cycles are affecting the market.

Marketing Objectives

• Improving the loyalty of the customer
• Grow digital presence

  Improving customer’s loyalty is important because it ensures that the customer trusts the product for its uniqueness and quality (McDonald 2007). It is important because when customers are loyal, they influence other people into consuming the product which is good for the company in terms of sales. Growing digital presence will help the company grow their visibility in the search engines and other social media platforms widening the customer base. Digital presence includes advertising and promoting through the digital platforms which makes the brand more recognized. This also enables consumers to give feedback on their views about the products through the platforms.