MK7041- Managing Sustainable Global Value Chains Assignment Sample

Introduction

Conscious Chocolate was founded in 2004 by Emma Jackman (Our Story, 2022). The company sells raw vegan chocolates without any extra added sugar. It started with her desire to indulge her friend in the luxurious food treating the soul and the body. This idea came to Emma when she returned from a healthy lifestyle in the Asian countries. In the cold climate, her craving for chocolates encouraged her to prepare such raw cocoa treats and sell them in the Big Green Gathering and Glastonbury in 2004. Her raw truffle with raw chocolate sauce earned a huge response from the crowd. Setting the chocolate sauce in ice cube moulds on returning home made her create the bars. With her raw chocolate bars, she started selling them to small shops in the Steiner School Market, in the lanes in Brighton and Borough Market. She eventually created her brand Conscious Chocolate by selling to the small shops. Making chocolate recipes in her own kitchen, she was the self-made chocolatier and the only employee in her company doing all the chores. However, with the growth of her business, she has established herself as a successful entrepreneur. It still sells handmade and hand wrapped chocolates. Her environmental consciousness has initiated the company to become a carbon-neutral factory with a robust ethical and sustainable commitment. Besides being a sustainable company, its production of vegan, raw, organic chocolates with plastic-free packaging and maintaining health standards have strategically helped them sustain themselves in the competitive market. In this report, the current marketing mix strategies of the company will be discussed. A suggestion for an appropriate international for its potential entry will also be provided.

The firm’s local/global marketing operations and its international competitiveness

Conscious Chocolate has occupied a larger market share in local and global markets. The current trend of vegan products worldwide has also encouraged its marketing operations. These vegan chocolates are high in fibre, bringing the healthier version to the mainstream with their appreciated flavours and exquisite quality. Emma Jackman has always focused on the healthier versions made from organic products and high-quality cocoa for growing its market (Conscious Chocolate gains major product development investment, 2022). She also ensures that these bars have kept the integrity of their ingredients with minerals and vitamins intact during the raw processing.

The international premium chocolate is highly competitive with significant players. However, the different combination of ingredients makes it an exquisite product in the international market. She made different ingredients wrapped in the chocolate, which enhanced its taste, like coconut and goji or Spirulina and Maca (Bloom, 2022). Another such example is her Love Potion No 9, which has the essential oils from orange and tamarind, helping the consumer uplift their mood and relieve anxiety. The plastic-free packaging and organic and vegan raw materials have also created competitive advantages for Conscious Chocolate. The pure and premium ingredients used also prevent the whitening of the chocolates under temperature change (Frequently Asked Questions, 2022). The prompt delivery in the UK mainland and Western Europe also attracts potential customers. Another competitive advantage is its conscious packaging which is biodegradable, recyclable and home compostable.

One of their competitive advantages is their ethical commitments. Besides using ecologically sustainable packaging, they also have a social mission. All their ingredients are ethically sourced using fair trade. They also practise sustainable practices like zero waste production with GMO-free ingredients. Renewable energy resources also power their production factory. They support all the female employees led by a woman entrepreneur. They also aim to empower their employees with opportunities and flexibility in their workplace (Our Ethics, 2022).

Appropriate international market to enter

To decide upon the international market to enter, market selection and market entry strategies need to be analysed. Selecting the appropriate market to enter is also influential for its competitive advantage and nature of marketing with its ability to coordinate with the international operations. It is essential to understand the competitors in the market. There are potential competitors in the international market like Cadbury, Kitkat, Galaxy, Nestle and others. There are also several organic and guilt-free chocolate brands: Green and Blacks, Divine, Chocolala and others (Top 10 ethical British chocolates, 2022). With such well-known brands, it enjoys tough competition in the international market. However, certain factors need to be considered before deciding upon a new market. The quality of human resources, the marketing competencies of the foreign subsidiaries, the host country’s laws and regulations, and the production unit’s location need to be considered, besides the country’s strategic importance for the business expansion.

Considering the contemporary trend of healthy chocolates, the Asian markets will be appropriate for Conscious Chocolate to expand its business across the borders. Furthermore, there is also a demand for organic cocoa products from premium ranges (Asia Pacific Cocoa and Chocolate Market Size, 2022). Thus Conscious Chocolate can easily grow its business in the Asian markets with its healthy, vegan and organic chocolates. Another advantage for the company is the acceptance of innovative flavours in these regions which is also a strength of Conscious Chocolate. However, the Asian-Pacific chocolate market is highly competitive with competitors like Hershey’s, Nestle, Ferrero and others (ltd, 2022). Therefore the company needs to adopt innovative strategies to survive in the competitive environment.

Figure 1: Rising trend of the Chocolate market in Asia

(Source: Asia Pacific Cocoa and Chocolate Market Size, 2022)

To enter the international market, the company should also have SMART objectives to check the reality of their marketing policies. So, first, they should have ‘specific’ goals about what they need to accomplish and how they can achieve it. Then it should be ‘measurable’ to track the progress, ‘achievable’ so that the goal is realistic, it should be ‘relevant’ and finally, it should be ‘time-bound’ to stay on the time track for completing the goal.

Evaluation of the firm’s entry modes in the new market

After checking the marketing objectives, the company needs to design its market entry strategies. There are three entry modes to decide through the vertical chain from the company’s perspective.

The hierarchical mode enables the company to control the international market completely. According to  Neubert (2018), this mode of entry enables the companies to keep control over their operations while collaborating with the local distributors. On the other hand, the intermediate entry mode includes both non-equity and equity agreements (Elia et al., 2019). Furthermore, the intermediate entry mode includes contractual arrangements like joint ventures, strategic alliances, franchising and licensing. As a result, the company has full ownership of the export opportunities. However, the contractual agreements involve risk in foreign trade. These entry modes are usually implemented when the company, despite having competitive advantages, cannot have control in the international market due to a lack of resources. On the contrary, it is easier for companies to internationally expand by exporting their products and selling them in foreign markets (Mittal, 2018). The export mode involves the export of services and products produced in the home country, this mode is very flexible, involving lower risks. This is also the preferred mode as it does not involve establishing operations in the new country.

However, to enter the new market, the company needs to have a SWOT analysis to understand its strengths, weaknesses, opportunities and threats to survive in the international market.

Strengths – Spending many years in Asia, Emma is very well accustomed to the people’s lifestyles and preferences. They prefer healthier versions of every food. Therefore, itt will be easier for the company to manufacture products which will suit those in the Asian market.

Weaknesses – There is competition in the market from other well-known brands and lack of advertising acts as their weakness in the competitive market.

Opportunities– The greatest opportunity is their creativity and using organic and premium ingredients in their chocolates which are very appreciable.

Threats– The customers in the international market may not be able to afford those premium chocolates. Another threat is the fear of depletion of the fine cocoa flavour shortly.

Evaluation of the firm’s international strategies

Conscious Chocolate needs to adopt new marketing strategies in the new market. In marketing, the STP (Segmentation, Targeting and Positioning) strategies help attract and target potential customers. The STP strategies can help the company formulate its marketing strategies, enabling them to attain a competitive edge while identifying the profitable marketing segments and creating better products. Segmentation refers to dividing the market into detailed segments, which will help analyse the opportunities in detail. It is essential to have a realistic chance of achievement in the competitive marketing perspective where they can identify their potential customers. As the company cannot provide its products equally among its customers, it is essential to identify the characteristics and potential marketing opportunities in those segments. The segmentation depends on the customers’ demographics, lifestyle traits, psychographics and behaviour. Therefore Conscious Chocolate needs to create a realistic segment for its successful operation. Targeting refers to targeting the appropriate segment and planning the marketing strategies accordingly. It aims to determine the marketing opportunities of each segment and choose the one that can match the company’s goal. Thus the correct segment needs to be targeted for designing measurable strategies. To determine its measurability, sustainability, accessibility, and actionability need to be analysed to determine the correct segment. However, a PESTLE analysis can help to identify the feasibility of the individual segments. After analysing the various characteristics and opportunities of the targeted segments, the brand positioning needs to be done to stand against the competitors and fit the customers’ needs. A positioning map can be constructed to determine its positioning, and the USP to the desired segment needs to be understood. This STP strategy ensures that an effective and efficient marketing strategy is formulated and the relevant messages are delivered across the board for developing other essential strategies. It helps them target the marketing messages to efficiently serve the customer base (www.researchgate.net, 2022).

According to Thabit and Raewf  (2018), Marketing Mix is a conceptual framework for developing long and short term strategies as an active part of marketing. It is a controlled group of tactic variables that helps decide its marketing strategies from the feedback of a targeted group of customers. Among the 7Ps of the Marketing Mix, 5Ps are very significant in choosing the effective strategies. They are people, product, price, place and promotion. The Product or services provided are the main elements in the marketing mix. The appearance, marketing, branding, quality and packaging involve the product decision in the Marketing Mix. The Price involves the overall cost involved. Pricing is an influential element for surviving in the competitive environment. It influences the organisation’s profitability and the customers’ buying capacity. Promotion is the most significant element of the mix, which encourages the customers to buy the products and services after being aware of their qualities. Then there is Place, which refers to the places involved in the production, sale, logistics, and warehouses. Finally, there are the People, which includes both customers and staff. The customers’ needs and the availability of the human resources are the two essential elements for designing the marketing strategies.

Figure 2: 5 Ps of Marketing Mix

(Source: The Marketing Mix 5 P’s- Helping You Choose the Right Strategies • InHouse Marketing, 2022)

Recommendations

Market entry mode – For Conscious Chocolate to enter a new international market like Asia, it can be recommended to follow the joint venture from the intermediary market entry mode. It will be highly beneficial to the company to survive in the competitive market. Having partners in the host country can easily increase their speed of market entry. Further, the partners can share management skills and technology to stand against the competitors. With efficient partners in the Asian markets, Conscious Chocolate can entrust them with the marketing and advertising department when it can concentrate on quality and production. This way, the company can enhance its expansion in the foreign market.

Local production unit – Conscious Chocolate can establish its local production facilities in the international market instead of importing them into the new markets from the UK. It can be beneficial for them as it can save the cost of export and import, defend the existing business, avoid certain government restrictions on import and other manufacturing information, and gain new business. It can also boost the local economy, reduce the emissions during transportation and ensure timely delivery of the products with control over the production.

Promotion – The chocolate company should increase its promotion among the communities, making them aware of the quality of their product.

Quality of the product – The company should not compromise the quality of their products in the international market, even if it negatively affects their selling price. This can also help them retain their loyal customers.

Conclusion

It can be concluded that the Asian market is appropriate for Conscious Chocolate to expand its international market. Various marketing strategies have been discussed that can be adopted by the company to thrive in the international market while designing its marketing strategies.(MK7041- Managing Sustainable Global Value Chains Assignment Sample)

References

Asia Pacific Cocoa and Chocolate Market Size, 2., 2022. Asia Pacific Cocoa and Chocolate Market Size, Share | Report [2027]. [online] Fortunebusinessinsights.com. Available at: <https://www.fortunebusinessinsights.com/asia-pacific-cocoa-and-chocolate-market-104205> [Accessed 7 May 2022].

Bloom, C., 2022. Emma Jackman | StyleNest. [online] StyleNest. Available at: <https://www.stylenest.co.uk/lifestyle/five-minutes-with/emma-jackman/> [Accessed 7 May 2022].

Confectionery Production. 2022. Conscious Chocolate gains major product development investment. [online] Available at: <https://www.confectioneryproduction.com/news/26172/conscious-chocolate-gains-major-product-development-investment/> [Accessed 7 May 2022].

Consciouschocolate.com. 2022. Frequently Asked Questions. [online] Available at: <https://consciouschocolate.com/pages/frequently-asked-questions> [Accessed 7 May 2022].

Consciouschocolate.com. 2022. Our Ethics. [online] Available at: <https://consciouschocolate.com/pages/our-ethics> [Accessed 7 May 2022].

Consciouschocolate.com. 2022. Our Story. [online] Available at: <https://consciouschocolate.com/pages/our-story> [Accessed 7 May 2022].

Elia, S., Massini, S. and Narula, R., 2019. Disintegration, modularity and entry mode choice: Mirroring technical and organizational architectures in business functions offshoring. Journal of Business Research, 103, pp.417-431.

InHouse Marketing. 2022. The Marketing Mix 5 P’s- Helping You Choose the Right Strategies • InHouse Marketing. [online] Available at: <https://inhousemarketing.co.nz/the-marketing-mix-5-ps-helping-you-choose-the-right-strategies/> [Accessed 8 May 2022].

ltd, R., 2022. Asia-Pacific Chocolate Market – Growth, Trends, COVID-19 Impact, and Forecasts (2022 – 2027). [online] Researchandmarkets.com. Available at: <https://www.researchandmarkets.com/reports/4591908/asia-pacific-chocolate-market-growth-trends> [Accessed 7 May 2022].

Mittal, S., 2018. Choice of market entry mode: A critical issue in international business. Choice, 4(6).

Neubert, M., 2018. Internationalisation behaviour of small and medium-sized enterprises from emerging markets: implications for sustainability. Latin American Journal of Management for Sustainable Development, 4(3), pp.226-238.

the Guardian. 2022. Top 10 ethical British chocolates. [online] Available at: <https://www.theguardian.com/environment/2007/sep/28/food> [Accessed 7 May 2022].

www.researchgate.net, 2022. [online] Available at: <https://www.researchgate.net/publication/319085560_Market_Segmentation_Targeting_and_Positioning> [Accessed 8 May 2022].