In addition, the market segmentation, market positioning and target market that Whittaker is concerned with is also discussed. 1. 3 Background The background of this report is to ensure that Whittaker do proper strategic planning to keep up with the ever-changing environment and trends In the market, to have a competitive advantage over their competitors and meet the varying needs of the consumers, In this case shifting the position of their chocolate products to becoming more luxurious and catering more to the health-conscious.
Doing an environmental scan is very essential to find out the present situation of the market as it would enable Whittaker to determine what new markets it should enter or new reduces to innovate or focus on. 2. Industry Overview The industry that Whittaker operates in would be Chocolate and Confectionery Manufacturing. The chocolate industry, consisting of 152 businesses, holds the biggest share In the confectionery market and It has been gradually Increasing and remained resilient over the years, with expectations to grow by 2. 3% In 2008-2013 to a total of $3. 3 billion in revenue. A rising health trend is now occurring and a change of consumer’s needs and wants is shifting toward the healthy lifestyle (IBIS world, 2012). *Graphs depicting chocolate market share and health consciousness is attached in appendix A and B 3. Company Overview James Henry Whittaker started the business of Whittaker In Christopher in 1896. Whittaker is the second-biggest chocolate brand in New Zealand. It ensures top- quality products by controlling its entire manufacturing process and labels themselves as a “bean-to-bar” manufacturer (Whittaker, 2011). 3. Product Whittaker offers a wide variety of products, ranging from blocks, ice cream, pips, chunks, mall slabs, slabs, Santa, squares, toffee milk and k-bars. The focus product would be the elegantly packaged Santa bar, which means health in a happy way. It comes In five different flavors, 3 of which are dark chocolate. The reason for selecting these Santa bars is that dark chocolate is a healthier alternative, which fits portion control. (Whittaker, 2011) 3. 2 Competitions The direct competitors, which sell chocolate confectionery products akin to Whittaker would be the Catbird mini fingers and Royce nutty bar chocolate.
Indirect competitors consist of companies that sell products such as sweets confectionery, cereal bars and chewing gum such as Starboards and Uncle Taboo’s. Substitute products are fruits and Carob. (Christopher Adams, 2010; Whittaker, 013) 4. Micro and Macro-environment forces 4. 1 Micro-Environmental forces 4. 1. 1 Suppliers Prospects may have to be curbed for the 2012-2013 crop harvest for the growing regions in Shania’s Cocoa due to the lack of rain, leading to a drought, causing a shortage.
Thus, Whittaker might also have to find new alternative suppliers to meet the market demand for cocoa beans. Due to the fluctuation of prices in the past, suppliers face many uncertainties in relation to their income. The firetrap agreement enables farmers to receive a fair price for their cocoa as it reduces the number of suppliers leaving the trade. With Whittaker as a part of the fair trade agreement, it would strengthen the relationship with suppliers. (Kook Denton, 2012; Lindsay Shelton, 2013; Francisco Redouble, 2010) 4. 1. Marketing Intermediaries Marketing intermediaries such as Woolworth and Coles promote, sell and distribute Whittaker chocolates to final buyers. They are distribution channel firms that make sales to final customers and Whittaker has to improve and sustain a close relationship with these resellers as they have the biggest customer base amongst all with 45. 3% patron’s, holding a substantial amount of power. As such, Whittaker can obtain better advantages such as getting prime product area shelf-displays. (KEMP, 2012) 4. 1. 3 Competitors From the graph above, Whittaker market share is part of 10. % held by other ancillary confectioneries, while the majority of 51% is owned by Catbird, followed by Nestle and Mars with a market share of 23% and 15. 1% respectively. 4. 2 Macro-Environmental forces 4. 2. 1 Natural The natural environment involves Cocoa beans that are needed by Whittaker to produce their chocolate products. Over the next few years, the world is expected to ace a chocolate ‘drought’, leading to soaring prices of cocoa beans due to insufficient 4. 2. 3 cultural From the graph, cocoa farmers are severely underpaid.
Under the firetrap agreement, farmers can now receive a fair price for their cocoa. Whittaker has two firetrap agreements for their dark chocolate, allowing them to paint an ethical picture of their company. This would attract consumers who are concerned about the origins of their food. (Lindsay Shelton, 2013; Rob Stock, 2009; Sofas, 2013) 4. 2. 4 Demographic (Australian government, 2004) Australia is facing an ageing population and adults tend to enjoy more dark to milk housecoat as they age while children generally prefer milk chocolate.
With a prevailing ageing population, Whittaker might shift their focus on targeting adults in terms of packaging, health and luxury. (Farrell. L. , Shields, 2007) 4. 2. 5 political Political unrest is brewing In the Ivory Coast where 40 percent of the world’s cocoa beans are grown, leading to the significant depletion in the number of certified firetrap cocoa farmers. This caused a shortage of cocoa beans and decreased total international cocoa trade, affecting Whittaker production of chocolate. (Watkins and Thrill 2011) . Segmentation, Targeting & Positioning 5. Marketing Segmentation 5. 1. 1 Importance of market segmentation “Market segmentation involves viewing a heterogeneous market as a number of smaller homogeneous markets, in response to differing preferences, attributable to the desires of consumers for more precise satisfaction of their varying wants. “(Smith, important for Whittaker to have market segmentation, as customer requirements are too diverse. Focusing their limited resources on customer groups with the same requirements allows for better utilization of resources and opportunities to create a nominative advantage. Dib and Siskin, 1997) 5. 1. 3 Whittaker targeted segment Whittaker targeted segments would first consist of the demographic segment, whereby persons would be aged 18-45+ years old (NCAA Sweet Insights, 2010), targeting both genders with an annual income of $30,000 to $50,000 per annum. The chirography’s would include the low to middle social classes and a healthy lifestyle. For behavioral benefits sought would be a healthier alternative, top-quality value chocolates and strong loyalty status and positive attitudes of consumers. For geographies, it would be based in Australia.
As the focus product is the dark Santa series, Whittaker would be targeting adults as consumer’s increase in age and consumption of dark chocolates is directly proportional. From the graphs in appendix C, 38% of adults of all ages, which holds the majority of the market share, prefer eating chocolate pieces to any other types and this would be to maintain portion control. (NCAA sweet insights, 2012) 5. 2 Target Marketing Whittaker has adopted the differentiated strategy as they have a wide variety of products that caters to different segments of the market.
Before selecting a target, Whittaker has to evaluate the market segment by using three factors. Firstly, for segment size and growth, the target market is increasing, as there is an ageing population. Secondly, for structural attractiveness, Whittaker has ventured into the healthier range of chocolate products that has lesser competitors. Lastly, objectives and resources of Whittaker total control of their manufacturing process and the bean-to-bar concept ensures that their product meets the healthy and high quality standards desired by their target market. Kettle, Burton, Deans, Brown & Armstrong, 2013) 5. 3 Market Positioning Positioning shows the place where existing or to be issued products are put in the market place by the customers (Gardenia, 2009). Product. Catbird fingers positions itself as a low priced, low quality product and Royce Nutty Bar Chocolate positions itself as a high priced, high quality product. Whittaker is trying to promote elegance and luxury by introducing the Santa bar as the luxury chocolate market continues to become increasingly mainstream, with the psychology that even expensive chocolates are an affordable luxury.
Evidence of rising luxury chocolate trends can be seen in appendix D. KEMP, 2012) 6. Conclusion In conclusion, the environmental scanning provides Whittaker with decision-making information that they can use to create a competitive advantage. The micro and macro-environmental factors gives Whittaker a situational awareness to aid Whittaker in achieving their goals and objectives. Whittaker creates value for customers by the adoption of a differentiation strategy of luxury and health properties, creating brand loyalty as well as repeat customers.
Analyzing market segmentation, targeting and positioning enables Whittaker to better focus their mime, effort and scarce resources on the particular market segment, better target its audience and position its products such that it will attract and retain Whittaker intended consumers of adults. 7. Recommendations Further research that Whittaker should conduct would be obtaining more information through surveys, on the preferences of consumers such as adding high nutritional health nuts and fruits to widen the variety of the Chocolate Santa bars.