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Indonesia is one of the growing economies. From the report, it can be concluded that Indonesia has been a developing country in which chocolate company can invest with having ample of opportunities. Haigh’s chocolate is a small company and wants to expand more and wants to sell its products and services in the Indonesia market. It also understands strength and weakness of the competitors and prepares international marketing strategy which helps it to cope with the risk and to fight the competition. It also measures the market and environment so that future can be predicted and strategies can be made.
This report will concentrate on identifying the business and marketing environment persisting in Indonesia market. The report will consult the Haigh’s Chocolates in Australia which is chocolate maker Company and makes fine chocolates from coeca, economic environment, social environment; technological environment which can promote Haigh’s Chocolates to conclude its marketing activities, competitive environment will also be discussed in Indonesia in order to gain knowledge on the level of competition and its impact on Haigh’s Chocolates. In last report will discuss on various pillars and elements of marketing in marketing internationally.
Research and analyses the market environment in Indonesia.
One of the methods is being chosen to analyse the market is PESTEL. The marketing research is being done in the Indonesia market so that theHaigh’s Chocolates can be sold (Cadle, et. al., 2010). Below are the analyses: -
The PESTEL stands for:
PoliticalFactors:Political environment or factors are the factors which help in knowing the political change in the market. The policies are being made by the government in order take care of the environment and the natural resources (Gupta, 2013). The Indonesia is a developing country, it has a democratic government. So, the people have the right to choose the product which is being present in the market. In the market, various products are available to satisfy the demands of the market. Haigh’s chocolate has to enter in the market which needs to fulfil the policies and rules made by the political parties. Though the organization is very small in size and has fewer funds it needs to understand the rules and regulations made by the Indonesia government. The trade policies are to be followed which is being implemented on the trading of the product.
Economic Factors:The financial position of the country is being analysed by the analysing the economy of the country.The economy of the country must be strong and has many of the positive factors which can give a boom to the economy. The per capita income of the person living in Indonesia is strong and has a good lifestyle to spend. The money is being circulated at equal intervals so that shortage must not be arises. GDP is the most important factor to be analysed while calculating the economic factors. Haigh’s chocolate has to check the financial position of the country Indonesia. Economic status has to be analysed as to sell the product in the market(Gupta, 2013).
Social Factors:Social factors are the factors which are being understood by the Haigh’s chocolate. Social factors are the choice made by the people of the Indonesia. The choices are different as the people belong to the different areas as in rural and urban in Indonesia. So, the selection of the things is different. As Haigh’s chocolate is small in size so the target market will also according to the area and characteristics of the people(Cadle, et. al., 2010). So, market is to be selected by Haigh’s chocolate according to the size of the area also prices are being set accordingly. The target market for Haigh’s chocolate can be students who study in the college, universities, and schools.
Technological Factors:The technological factors are the factors which help in making changes in the environment (Gupta, 2013). The changes and adaptation can be done in the process of chocolate by Haigh’s chocolate as per the advent of new technology. The supply chain and the transportation can be done by Haigh’s chocolate in a different and unique way. Moreover, Haigh’s chocolates promotion must be effective and done on the different way which saves the money and time while distributing the product in the Indonesia market and spreading the information about the product in the Indonesia market. TV channels are the fastest medium can be used by Haigh’s chocolate to promote the product’s information. Hence, it will make the target market to know the features of the product and the price.
Environmental Factors:The area of the Indonesia influences the manufacturers to export and import their product in their country to their population. The geographical boundary of Indonesia is the factor which has to be crossed and being taken into consideration while marketing the product in the market of Indonesia. The weather of the Indonesia is the factor which has to be taken into consideration while supplying the chocolate in the Indonesia market. The natural calamity of the Indonesia is good or not while supplying of the Haigh’s chocolate in the market (Gupta, 2013).
Legal Factors:Before exporting the product into the market, the legal formalities have to be fulfilled. Without these legal formalities, no company can sell its product and services into the market. Haigh’s chocolate has to follow the laws made by the government. It has to work according to them. Wages to be provided to the labour must be correct according to the skills and the work performance. Moreover, the taxes have to pay on time to the government as to work properly in the market. Haigh’s chocolate have to think twice while entering into the market and it has to analyse the market of the Indonesia before selling its product and services(Terpstra, et. al., 2012).
Brief industry overview
Indonesia is fastest growing chocolate market. Indonesian consider chocolate as luxury item. Indonesians love chocolate. In Indonesia there is large production of cacao beans. Further cacao beans are exported in large amount to Europe and United States. The producers of Indonesia are trying to produce chocolate at affordable and high quality(Mordor Intelligence, 2016). The chocolate was used to be imported by industries in Indonesia but now the in house production of chocolate has been initiated and also there is more innovative and complex products are produced for customers. Thus for Haigh’s chocolate the Indonesia market is good and also involve lot of opportunities to grow.
Develop a competitor analysis
Stability in the environment is one of the important factors in order to function effectively in a competitive environment. Competition is very healthy in Indonesia. The government of Indonesia has also established completion policy in order to ensure healthy and competition which is providing immense benefits to customers.(usaid.gov, 2015). The market of Indonesia is highly regulated thus ensures that there is no violation of competition laws and provisions. There is also rise in competitors in the industry of Haigh’s Chocolates which is very risky and threat for Company to survive in long run.
Porter five forces model for Indonesia market
Existing player- There are many food and chocolate industries such as Silver queen, Nestle Indonesia, Delfi limited,Mayora Indah and Indo food which are providing chocolate products. These are the big and major competitors for Haigh’s chocolate. Companies such as Nestle have its own brand value which is making easy for Company to market its products especially chocolates to Indonesians. Delfi limited is a domestic producer of food and chocolates in Indonesia controls 5.2% market by its high sales(Speciality food, 2016). Domestic producers such as Delfi and PT Mayora Indah Park using niche market as marketing strategy where company has concentrated on specialised segmented market to achieve monopoly. These Companies also promoting and selling goods by segmenting target market. They are also keeping their prices competitive by buying beans and making chocolate locally. Foreign producer such as Nestle and Silver Queen in Indonesia market are using multi market strategy where it is focusing on different markets to reach large customers. Thus;Haigh choclate will require managing its marketing strategies and has to follow economical pricing and other related factorssuch as market positioning and setting of target market. Haighs chocolate will have to bring some uniqueness in its chocolate in order to attract large customers and to survive in such competitive environment of Indonesia market. Haigh’s chocolate will also be requiring changing its market positioning by changing the perception of customers of Indonesia. Market of Indonesia loves is indulge in use of cacoa beans thus Haigh’s chocolate will either require to follow that or will have to change the perception of customers.(Porter, 2011).
Supply-There is highdemand forchocolate by youngsters and adults in Indonesia market. The supply of chocolate is relatively high matching with the demand (Porter, 2011). Most of the Companies of Indonesia import chocolates which are highly branded. Thus Haigh’s chocolate can bring uniqueness in its chocolate by bringing different flavour, maintaining high quality, attractive packaging and low prices of chocolate product which can fulfil the demand also the taste of importers and customers.
Substitution-There are many substitutes of chocolates in Indonesia market such as Delfi limited, Mayora Indah. Customer will shift to substitutes if they are will not satisfy with the product provided by Haighs chocolates(Terpstra, et. al., 2012). Thus Haighs chocolates will also have a threat of substitutes. Due to availability of close substitutes there will be high competition. Thus strategies can be formulated with the help of substitute’s analysis.
Customer-One of the most common behaviours of the customers in choclate industry is always demand of the product at low prices and also at longest credit term. Most of the companies in Indonesia market which are generally newly established in chocolate industry give a number of facilities but it fails to meet the certain demand by the customer(Porter, 2011). Companies in Indonesia market also cannot guarantee the security of supply with the best quality. Haigh’s chocolate will also require analysing the behaviour and want of customer as most of the customer at the end only prefer and concern of the prices.
Newentrance is one of the biggest challenges for Haigh’s chocolate. Many players are increasingly entering in chocolate industry and can beat the local market share of chocolate industry.(Mordor Intelligence, 2016). It will largely depend on the amount of supply from the new entrants and also demand of customers for chocolates in Indonesia market. Chocolate industry in Indonesia is threatened from new entrants as new entrants can lead to decrease in market share of existing Companies in chocolate industry. They can also have substantial resources which can lead to increase in their capacity of bringing low prices of their products and can attract large customers. As chocolate industry is one of the most profitable due to high number of chocolate lovers in Indonesia market (Mordor Intelligence, 2016). Thus profitable industry will definitely attract more competitors as new entrants. There are fewer barriers to entry to the market of Indonesia due to immense support of government. Thus new entrants will lead to increase in production capacity and relatively increase in consumer demand and less profit to go around. In this case Haigh chocolates will have to fight with the new entrant and existing competitors in quality assurance and maintenance of low prices of product. Haigh chocolates in order to compete with new entrants can adopt niche marketing strategies and can explore niche and can spend time and resources in identifying its ideal customers. Haigh chocolates can also use pricing strategies where it can lower its prices for some specific period and can attract large customers can gradually increase its prices. Haigh chocolates can focus more on increasing its customer database which will help in proper handling of new entrants as clear picture can be created of the new competitor and its affects.
There are number of the competitors in chocolate industry of Indonesia market. So,Haigh’s chocolate is to analyse the market conditions in which the competitors play strategically. The level of competition in chocolate industry is being increasing day by day in Indonesia market. (Cadle, et. al., 2010). This makes the makes the Companies in chocolate industry in Indonesia market more strong. Delfi limited, Mayora Indah is using beans in their chocolate production which is making their product attractive.(Babatunde and Adebisi, 2012). To make effective strategy it is important to know the current market conditions and market environment in Indonesia market (Gupta, 2013). The next step is to analyse the share of market captured by each brand of chocolate in Indonesia market. Strength and the weakness are to be analysed so that the weakness can be converted in the strength. The weakness of the other competitors in chocolate market is being taken advantage so that the competition can be increased.(Osita, et. al., 2014). The competitive analysis will help the Haigh’s chocolate in knowing a number of investments are to be done by them in setting the correct position in the market.
Develop and justify an international marketing strategy for Indonesia
One of the primary and fundamental decisions for international marketing is to make an entry and in order to enter in Indonesia Market Haigh’s Chocolates can adopt following ways:-
Licensing and Franchising- Licensing and franchising are one of powerful strategy for marketing of physical goods. Haigh’s Chocolates can enter into an agreement with chocolate manufacturing company of Indonesia such as Mayora Indah can give permission to use manufacturing process of chocolates.(Ruzo, et. al., 2011). As Mayora Indah is already dealing in same industry and it will be easy for Haigh’s Chocolates to market its chocolate by giving licensing franchising to this Company. This will help Haigh’s Chocolates to access international market easily without any risk from government intervention.
Exporting-Exporting is a medium where a Haigh’s Chocolates can reach to Indonesia market and market its products. This marketing strategy of business can be long term and does not for increasing sales and profits (Babatunde and Adebisi, 2012). Exporting will help Company in testing international strategies and to increase its marketing of products.
Wholly owned subsidiaries- Haigh’s Chocolates may decide to establish a new firm and by building its own subsidiaries. Haigh’s Chocolatescan conduct further it’s marketing via using this subsidiary as a base. Haigh’s Chocolateswill require giving proper time and efforts in order to incorporate business further to run the business in Indonesia market. But at the same time Haigh’s Chocolates will have more control and management of the business in Indonesia. Wholly owned subsidiaries will be helpful for Haigh’s Chocolates to entertain favourable tax treatment and Company can diversify its business and can control risk (Kartawinata &Wardhana, 2013). But it may lead to conflicts of interest between Haigh’s Chocolates and its subsidiaries. The focus will also get reduce to its main business.
Partnership/Joint ventures- Haigh’s Chocolates can either enter into partnership with other firms in order to market its product. Haigh’s Chocolates can also enter into Joint Ventures which is another approach to marketing internationally. Haigh’s Chocolates can adopt this marketing where the company can enter into an agreement with Delfi limited in Indonesia or Company of any other nation. Haigh’s Chocolates and Delphi limited can further pool resources together in order to run any program and can conduct marketing of its product and also can generate information regarding customer choice, behaviour and characteristics (Mordor Intelligence, 2016). The joint venture will help Haigh’s Chocolates sharing the risk from government and better local market intelligence. But joint venture may fail if culture and management styles of these two companies are not integrated and cooperated. There may be lack of support and leadership to new venture or partnership.
Contracting- Haigh’s Chocolates can also enter into any a contract withFerrero SpA in Indonesia and can exchange ideas and can contract out production withFerrero SpA.Thus Haigh’s Chocolates will save from exporting which will involve a huge amount of formalities. Here Haigh’s Chocolateswill train the contractor on how to manufacture other types of chocolate(Babatunde and Adebisi, 2012). Contracting will help Haigh’s Chocolates to save cost on developing its own manufacturing unit or investing time to build up its own new business. Haigh’s Chocolates will be easily getting market and thus will help the company to promote its brand.
STP and value chain
STP is segmentation, targeting and positioning which is an essential part of modern marketing. This model will help Haigh’s Chocolates to prioritise its prepositions and also covey relevant message in order to engage with audiences of Indonesia. Segmentation is the separating Indonesia market in smaller group with similar needs and identifiable characteristics (Powers, et. al., 2010). Targeting is focusing on group of related customers and offering products to them. Positioning is the creating a perception among the customers in Indonesia market regarding competitive products.
In order to gain the chocolate market of Indonesia, marketer of Haigh’s Chocolates is to create a market activity which can convey the value of the product(Majaro, 2013). Below is provided various elements of marketing which should be considered before initiating marketing:-
Product-With the use of this marketing element Haigh’s Chocolates will be able to sell its product in high quantity. Haigh’s Chocolates in order to increase its sales can include and consider many factors such as gaining knowledge on culture, religion, habits and level of disposable income of people of Indonesia. Haigh’s Chocolates can market its product where people are habitual of eating at least two or more chocolate in a day (Ruzo, et. al., 2011). Indonesia consumer market is chocolate lover and selling chocolate will be an easy and also more customers will get attracted in selling Haigh’s Chocolates. Competitors in Indonesia are also involved in developing new flavours and variety in chocolates. This is also a useful opportunity for Haigh’s Chocolates to grow and gain Indonesia market.
Place- Place is how to distribute products in the international market at the right place and at the right time. This is one of the critical issues in the international market as the distributional channel and perfect time for distribution cannot be evaluated. Indonesia follows thievery different practice in the distribution of the product(Powers, et. al., 2010). Thus Haigh’s Chocolates will need to investigate into distribution chain as it can be different due to the cost of transportation and profit margins. Haigh’s Chocolates will be required to see that whether the product sells directly to customers or there are some mediators such as retailers, wholesalers in the whole supply chain (Ayub, et. al., 2013).Haigh’s Chocolates target market can be youngsters, adult and children. Haigh’s Chocolates can attract this market with the help of social media such as facebook, instagram. Haigh’s Chocolates will be able to reach large customers by using this medium. Haigh’s Chocolates can cover that market where competitors are not involved and has not covered that market. In selecting the place for promotion of goods Haigh’s Chocolates should also consider the environment conditions such as natural calamity and weather of Indonesia market can be taken into account.
Promotion- Haigh’s Chocolates can decide an attractive and convincing message for people of Indonesia in order to attract them for the product. In deciding the message company must have the knowledge of Indonesia people. Haigh’s Chocolates must also evaluate the political climate as any there may some regulations and legal issues such as copyright, trade regulations, employment laws and safety from the government of Indonesia and which is required to be following. Haigh’s Chocolates must also gain knowledge on culture which is persisting in Indonesia (Powers, et. al., 2010). The level of media whether television, news channel social media must also be evaluated in order to make most of the selected media channel for conveying of the message.
Promotional tools can be advertising, price promotions, and point of purchase. In adverting company can use the maximum advertising which is commonly used by competitors and rival firms in Indonesia. (Babatunde and Adebisi, 2012). Haigh’s Chocolates can provide at lower prices, or can offer free for some specific period where it will earn break even profits. Promotion tool can be adopted by Haigh’s Chocolates as per competitor’s strategies such as use of competitive pricing in selling of products by having in house production of chocolates. Haigh’s Chocolates can also build up its own way of promoting its product which can convey message to large customers. New technology must also be adopted by Haigh’s Chocolates in promoting its product in order to survive in competitive world. Internet technology is one of most adaptive technology by Companies in Indonesia in promotion of its goods as this technology is very cost effective and attractive one. This technology will also help the companies to reach customers from all over the world.
In deciding final price of chocolates for Haigh’s Chocolates will require considering following factor includes cost of transportation, import duties or tariff paid, fluctuations in exchange rates and personal disposable income of target market and general economic condition of the economy such as high rate of inflation. In thecae of inflation, people will not be able to pay high rates for chocolates as it is not an essential and basic amenity for the survival of people and can be compromised by people for some time (Powers, et. al., 2010).Segmentation of Indonesia will be difficult for Haigh’s Chocolates as it has fourth largest population. Thus Haigh’s Chocolates will be required to focus on a different segment of Indonesia by analysing the taste and characteristics of the customer. Haigh’s Chocolates can also divide its segment of the market by educational, purchasing power, population growth, and income. Haigh’s Chocolates can promote its product by concentrating on segment of the market of Indonesia where the population is growing(Terpstra, et. al., 2012). Chocolate is a product which is highly acceptable with a population of every age. Target customer can be the children, students, adults, and youngsters. Haigh’s Chocolates can create a better positioning in target market by promoting a product which is acceptable by whole family members(Terpstra, et. al., 2012).Thus these all marketing strategies will definitely support Haigh’s Chocolates to implement its market strategies effectively. Competitors of chocolate industry in Indonesia are keeping their prices competitive by having its own production unit. Domestic producers of Indonesia have a good positioning and also control large population of Indonesia. Haigh’s chocolate will require looking at its competitor strategies in order to develop its own marketing strategies. It may also be require using different pricing strategies such as economic pricing, price skimming to gain the market. Haigh’s Chocolates will also be requiring looking at the inflation rate and per capita income of Indonesians in deciding final price for product.
This report has addressed to Indonesia market effectively. Further, it can be concluded that Haigh’s Chocolates has an ample of opportunities in entering to Indonesia market. Indonesians are great lover of chocolate. The chocolate producers in Indonesia import chocolates from any other Country. This can also be a positive point for Company as it can bring its own chocolate and attract many customers. Haigh’s Chocolates with its different taste in chocolates can cover large customers in chocolate industry of Indonesia. There is also fair competition in Indonesia market. With proper marketing strategies Haigh’s Chocolates can enter successfully in Indonesia market.
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