BUS5SMM - Marketing Assessment Answer - La Trobe University

Introduction

The Haigh’s chocolates company has been in business since 1915 and prides itself as being the oldest family-owned manufacturer of chocolate in the country. It prides itself of having stuck to its long-standing tradition of manufacturing premium chocolates with both passion and quality. In the industry; they have positioned themselves as a high quality high price chocolate manufacturer (Figure 2). They have also positioned themselves as one of the few chocolate makers that roast its own beans. By roasting their own beans, they are able to tweak their blends thus are able to come up with unique flavours, aroma and textures of their chocolates (Haighschocolates, n.d).

They offer over 250 chocolate varieties to the customers and this has increased the number of products that the customers can choose from. They also offer gift boxes and experience tours where they allow customers to experience the chocolate making process. Haigh’s Chocolates have positioned itself as a company that is keen on sustainable business practices (Haighschocolates, n.d).

According to Howarth (1995), companies have to keep environmental sustainability while undertaking their daily operations. Haigh’s has endeavoured to ensure that they protect the environment and the natural resources. For instance, they are UTZ certified which implies that they are committed to both sustainable farming and offering opportunities for farmers to improve their working conditions. By using the UTZ program, Haigh’s helps farmers grow better crops, and get a better income while also protecting the environment and securing natural resources. As a result of being UTZ certified, they have positioned themselves as the only Australian chocolate company to receive this certification (Haighschocolates, n.d). They are also a part of both the World Cocoa foundation as well as the international cocoa initiative that works to improve the lives of the overseas cocoa farmers in West Africa though the process of public certification. By partnering with these international societies, they are able to connect with other countries and governments and this ensures that they can access high-quality cocoa from these countries (Haighschocolates, n.d).

Haigh’s chocolate has strategically positioned itself as a company keen on promoting environmental sustainability. It came up with different chocolates that brought awareness to the endangered species in the country. In 1991 for instance, they partnered with Foundation for Rabbit Free Australia and created chocolate Bilbies that helped in creating awareness about this endangered animal. They have also created special chocolates to celebrate history in conjunction with Coopers and Yalumba (Galletly, 2015)

They have created other chocolate animals in the pursuit of the same. For instance, they have chocolate frogs that bring awareness to the endangered frogs’ species and they also created Giant Panda chocolates in an attempt to create awareness about the Pandas as well. Further to this, they are a firm supported of environmental causes and have positioned themselves as a company committed to the green initiatives. In packaging, for instance, they are committed to the concepts of reusing material as well as recycling. Their packaging materials are completely recyclable, biodegradable, water dispersible as well as home compostable. They also have a No plastic bag rule in all their stores (Nastu, 2008).

Haigh’s has invested in the underground underwater tanks that harvest water that falls on the roofs of the factory. This water is then used in the steam boiler system and helps them save a lot of water annually. The plastic that they receive from their suppliers is also donated to companies that deal with recycled plastics with the rest being disposed in plastic recycling trash bins (Becker, 1982).

The main products of Haigh’s are its artisan chocolates and its gifts. It has a wide variety of chocolates ranging from boxed chocolates to its chocolate novelties. Among its novelties, it has created various animal chocolates like frogs and pandas to raise awareness on their endangered nature. They also sell gifts for instance centenary collections or wedding collections or even gift cards. This wide array of products has improved its competitive position in the chocolate manufacturing industry (Haighschocolates, n.d).

In addition to the products, they also offer services which help to further differentiate them from their competition. For instance, they offer experience tours to its customers where they give customers an opportunity to witness how they manufacture their chocolates. In addition to these tours, they also offer travelling exhibitions where they showcase the history of the company from 1915.These exhibitions offer a deeper look to customers on how Haigh’s works and how it has grown over the decades. By doing this, they make customers feel like they are part of the company and this further elevates their market position (Watchman, 2015).

Due to the fact that Australia lacks a cocoa growing industry that is reliable, Haigh’s imports cocoa beans from other countries around the world. They source their raw cocoa from Africa, South America as well as the Pacific and then proceed to blend them locally. Other ingredients like sugar, milk power or dried fruits and nuts are sourced locally as a way of supporting the local producers (Haighschocolates, n.d).

A large portion of Haigh’s customer base is young people and couples who purchase the chocolates for either consumption or gifting. Due to its high-quality and premium price, it has been able to retain its customer base despite market and price changes (Wilde 2016.).

Marketing Strategies

Haigh’s range of products all attracts a premium price. Its strategy is offering high-quality products but at a high and premium price. To provide value to the customers and to justify these prices, they create artisan chocolates that are of the highest quality. It constantly trains its artisans in the art of creating handcrafted chocolates. This ensures that they are able to attract customers and also retain them (Ferrell et al., 1998).

Haigh’s uses various tools of advertising to promote its wide range of chocolates. Through its website for instance, it provides updated information about its products and the prices of all those products. Advertising campaigns have also been carried out to attract more customers. Social media has also become a vital tool in advertising and Haigh’s have tapped into social media to promote its products. They have a Facebook page that they use to reach the millennials who are its main customer base (Skålén et al., 2015).

Offering a good Customer experience has been employed by Haigh’s to promote its business. They have invested heavily in training their staff on how to treat customers well and how to keep them coming back. By treating the customers well, they retain customers and these customers then act as good ambassadors of the brand (Camp, 1989).

Haigh’s chocolates are distributed in their store locations and they do not use other retailers like the other chocolate manufacturers. They firmly control and monitor all their distribution and marketing channels. This strategy is aimed at ensuring that the brand maintains its image of luxury. It also ensures that Haigh’s maintains a friendly and personalised customer service. Staff training is given the highest priority to ensure that this is maintained (Wilden, 2016).

Product

Initially, Haigh’s offered only one single flavour of chocolate to its customers. Over the years, it had created over 250 types of chocolates and improved both the quality and the flavours of these chocolates. Due to constantly sending its artisans for further training, they have been able to keep up with the latest methodologies of creating highly artistic products. Due to this, Haigh’s has become renowned as an international chocolate brand (Wilden, 2016). The product packaging for its chocolates has also made it stand up. They have standard and aesthetic packaging that makes the brand stand out. Their packaging is also biodegradable and contributes to its commitment to environmental sustainability (Haighschocolates, n.d).

Place

Haigh’s operates a vertical integrated supply chain model. It manufactures its chocolates and then sells them directly in their specialised stores and do not sell through any retailers. They have maintained this model to ensure that they maintain their brand image of offering luxury goods and giving customers an excellent customer care experience. Haigh’s is located in Adelaide where it houses its factory and its visitor’s centre. This centre is open to visitors for a customer experience tour (Nenonen et al., 2014).

Promotion

Haigh’s is committed to continuous customer engagement on their product packaging and quality. They achieve this by running promotions, using social media as well as implementing advertisements. Most of its promotions are done through its retail stores because they use their stores to introduce new varieties of their products (Crompton-Reid, 2012).

Price

The prices for Haigh’s chocolates are set at a premium rate. To ensure that the customers feel like they are getting value for their money, Haigh’s ensures that they offer high-quality of products that are also aesthetically pleasing. These pries affect the customer base due to affordability. Only a certain segment of the population can afford these chocolates and this affects the sales because most people purchase these chocolates during holidays and other special occasions (Hamilton & Chernev, 2012).

Marketing Mix Comparison between Haigh’s Chocolates and Cadbury Chocolates

Product

Unlike Haigh’s, Cadbury doesn’t offer a wide variety of chocolates. It offers a small range of chocolate products and the quality is low as compared to the quality of Haigh’s chocolates. Cadbury has also not concentrated on product artistry and instead offers a highly standardised product image and type. Cadbury’s packaging is also inferior to Haigh’s this is because Haigh’s has invested in highly aesthetic and biodegradable packaging material (Wallop, 2016).

Place

Cadburys sells its chocolates through retail stores across the country and internationally which differs greatly from Haigh’s strategy which centres on its own retail stores. It has multiple manufacturing locations which are different from Haig’s which has a localised manufacturing location. On manufacture, the chocolate is transported to its stockrooms from where it’s transferred to retail stores that then sell the products to the customers. It also ships its products to more than 200 countries in all areas of the world. In terms of customer base, Cadbury’s will have a larger customer base due to its global locations (Wallop, 2016).

Promotion

Cadbury’s performs the majority of its promotions through TV commercials which is different from the promotions strategy employed by Haigh’s. In their commercials, they mainly engage in persuading the customers to by their products. Due to the global brand recognition, Cadbury’s promotions are more effective on a global scale. Unlike Haigh’s Cadbury’s is not keen on customer engagement and doesn’t depend on customer feedback when making decisions on packaging and quality of products. This has given Haigh’s an edge in the Australian market because they appreciate the engagement and feel like they are involved in creating the chocolates (Geiger & Kjellberg, 2012).</p.

Price

Cadburys has set its prices at an affordable rate unlike the Haigh’s prices all the products they offer have been priced bearing in mind the mass market and are therefore affordable. This gives them a larger customer base due to the affordability. Their affordability makes Cadbury sales to be higher because they are purchased almost throughout the year and not necessarily during special occasions (Cadbury, n.d).

Recommendations for Improvement of Marketing Mix

Due to the increased need for products that are health conscious, Haigh’s can improve its chocolate range and include chocolates that have health considerations. For instance, they could introduce a chocolate variety that is low on sugar or gluten free and therefore low on Calories. This would improve their marketing mix because it would attract a new segment of health-conscious customers to their brand (Payne & Frow, 2014).

To improve their products range, Haigh’s can develop its gift voucher range. Gift vouchers have become a popular product among corporate and company reward schemes. If they develop this, they will expand their customer base and will increase their profit margins. By introducing gift vouchers of different amounts, the customers will also increase because people will be able to pick the value of the vouchers that they want (Johanson & Vahlne, 2011).

In this electronic age, Haigh’s need to embrace online selling. In spite of their reservation about what online selling would do to their brand, their lack of embracing this trend will cost them a segment of their customer base. Online selling will also enable them to develop their market which is currently limited to some parts of Australia. Online selling will also reduce the operating costs because it will eliminate the need for physical locations and will also reduce staffing costs that are currently high (Day, 2011).

The promotion strategy employed by Haigh’s is very passive and will not be effective in promoting the products especially in today’s competitive environment. They need to employ a more aggressive marketing strategy and increase their tools of advertising. For instance, they could create documentaries about the history of the company and this will appeal to the customers because they have defined the company as a company proud of its traditions and history. This would also attract the older customers who will be drawn by the aspects of history and family (Kotler, Cunningham, & Turner, 2001).

Haigh’s should also improve their CSR efforts. The awareness campaigns that they engaged in the past had a positive impact on the company’s image and on the sales. They should engage in such awareness campaigns in collaboration with other agencies. Despite these efforts being a part of social responsibility, they will help in promoting Haigh’s and improving their image (Woodcock, Green, & Starkey, 2011).

Although their price has been a major differentiating factor between them and their competitors, it also costs them customers. Most of its competitors offer lower priced chocolate and for Haigh’s to be able to compete with them; they have to find a way to reduce their prices while also maintaining their traditional good quality (Borden, 1964).

There is an urgent need for business expansion and market development. In spite of the fact that they have been in existence for more than 100 years, they have not been able to implement a global expansion. They only sell the products through their specialist stores and those stores were 14 by 2012.This limits their market share because they depend on only these 14 shops to push their products to the consumers. To increase their market share, they need to increase the brand presence in the entire country and also possibly expand to other countries (Chesbrough, 2010).

Haigh’s needs to improve its resource use to improve their environmental sustainability. The cocoa beans they receive are usually in raw form and they blend them during their chocolate manufacturing process. They need to find a way to use the by-products of the manufacturing process in an environmentally friendly manner. For instance, the husks from the cocoa beans can be processed to make cartons or fertiliser that can be offered to the cocoa growing regions to improve the yields (Frow et al., 2014).

Conclusion

Based on this analysis, Haigh’s is in a strong competitive position in the chocolate market. Its current marketing mix helps them remain relevant in the market in spite of their premium pricing. Its positioning in the market is strong according to the positioning chart illustrated in Figure 2. Unless the competitors improve their quality to where it approaches Haigh’s, they will not be in a position of taking Haigh’s loyal customer base. Online selling will be of immense help to Haigh’s if they employ it. The current digital age demands that all companies embrace e-commerce. If they do, they will be able to take advantage of their huge Facebook presence and concert this to sales (Rundle et al., 2013).

In order to maintain the strong position, however, Haigh’s needs to understand that its main selling points are its history and high-quality products. It should ensure that it maintains these two aspects and use these aspects to continually assert itself in the market. Its SWOT analysis illustrated in Figure 1 has also brought to light some weaknesses, threats as well as opportunities that they need to tackle to ensure long term viability of the business.