MKT600 Marketing | New Market Entry of Donald B

Donald B is a chocolate product maker who is offering chocolates in the Australia. It has two stores in Melbourne which are working to maximize and enhance the profitability of the business. Donald B wants to grow and expand its brand internationally and nationally and strive with larger rivals producing cocoa product, drinking chocolate, confectionery, candied nut and candied popcorn etc.

Behavior of buyers in relation to chocolate products 

It is stated that buyer behavior is needed to expand and explore the chocolate products in the Japanese market. Further, it also helps in making effective decisions in the foreign market. There are enormous component that may influence the behavior and income level of the customers globally. Some of the factors that may put direct impact on the buying behavior have been discussed below.

Perception and attitude of customers: The perception, preferences, and tastes of the Japanese can affect the sale and revenue of Donald B in the country. Consumers in Japan value brand information, delivery, service, advertising and packaging as significant elements in assessing taste and quality of chocolates and in making purchase decisions globally (Santandertradeportal, 2018).

Trends: The trends of Japanese market put direct impact on the sale and revenue of Donald B in such market. In Japan, various companies are also introducing chocolates in various flavor and sizes to attract and retain the consumers globally. Donald B wants to introduce the chocolate in such market, is expected to drive the market where consumers are more price sensitive. The market trends and quality of the products would affect the buying behavior of the consumer in the Japanese market (Rahbar & Abdul Wahid, 2011).

Product selection: It is noted that consumer chooses the products after focusing and analyzing the tastes and quality of chocolates. Product selection is one of the significant factors that need to be considered while analyzing the behavior of the consumers (Mordorintelligence, 2018).

Purchase timing and amount: It has been reported that Japanese prefer to purchase more chocolates on festivals and occasion like Christmas, birthday and Easter. Therefore, the needs and expectations of the Japanese are identified by the company while functioning and implementing business activities in Japan. Along with this, income level of the Japanese also would be evaluated and identified to increase sale and market share in such market (Solomon, Dahl, White, Zaichkowsky & Polegato, 2014).

Dealer’s preferences and choice: It is stated that buyers prefer to buy the chocolate products from the trustworthy and reliable dealers to ensure that they get the right and delicious chocolates on right time. Without analyzing the choices of the dealers, the company cannot uplift profitability in the Japanese market (Mohan, Sivakumaran & Sharma, 2013).

Socio-economic level: It is studied that socio-economic factors may affect buying behavior of the consumer internationally. Thus, Donald B needs to focus on the socio-economic factors to compete with rivalries in the Japanese market. It will also help to make a dynamic and strong image in the minds of the customers (Mordorintelligence, 2018).

Analyze the micro environment 

The micro environment of Donald B includes the following:

Suppliers: The suppliers play a significant and vital role in expanding and exploring the business internationally. Suppliers provide the raw material, unfinished goods, resources, and labor to the firm to manufacture chocolate products in the Japanese market. The effectiveness and efficiency of the suppliers determine and analyze the success and growth of the firm in terms of producing chocolate products. The suppliers of Donald B in Japan can be categorized into two parts such as material suppliers and labor suppliers. Labor suppliers handle and manage the quantity of labor and reduce the company from the shortage of labor. On the other hand, material suppliers manage and handle the material needed by Donald B in order to produce the finished product for sale in the competitive market (Ducki, Miralles-Garcia, Zumbé, Tornero & Storey, 2008).

Market intermediaries: The market intermediaries of Donald B further help to advertise allocate and sell its products to the end customers in Japanese market. The market service department of Donald B supports in the promotion and encouragement of the chocolate products and acts as a communication channel between the customers and firm as well. The other intermediaries such as banks support to offer funds to the firm and play a vital role in the continuity of the business in the Japanese market (Copetti,  Iamanaka, Pitt & Taniwaki, 2014).

Public and customers: The customers and publics are essential to grow and survive business in Japanese market. The immediate customers of the firm provide the chocolate products to the customers at suitable prices and reasonable profit. Donald B needs to focus on the customers and publics to make a bright brand image in the minds of end use customers.

Summarize the competitors 

The main competitors of the firm include Meiji milk chocolate bar, Meiji almond chocolates & Macadamia Chocolates Company, Meltykiss chocolates, Glico champagne series, Men’s pocky & heartful pocky, Carre de chocolat cacao 70 and chocoball grande. These competitiors may influence the progress and success of Donald B in the Japanese market. Meiji milk chocolate bar is one of the biggest chocolate brands in Japan to attract and retain maximum number of customers internationally. Meiji milk chocolate bars are categorized into grids of 12-15 squares, making them so easy to exchange with loved friends and other persons (International cocoa organization, 2018). This brand can impact on the functions and activities of Donald B in Japanese market. On the other hand, Meiji almond chocolates & Macadamia Chocolate brand further helping in making a strong and dynamic image in the Japanese market (Japaninfo, 2015). The main target market of the firm is kids who are between the age group 7-15 years because they like chocolates in a large extent. 

Along with this, Meltykiss chocolates melt in the people’s mouth. These cocoa powdered cubes and wafers hide exquisite fillings within rum raisin, brandy and strawberry. Most of the people in Japan like this chocolate because it is available in Japanese market in various flavors. It is noted that Glico’s champagne series is a cooperation and collaboration with the award winning Japanese pastry chef Hironobu Tsujiguchi and adds a touch of refinement to three of Glico’s most well known and famous treats such as Caplico, Pocky and Premio. The Champagne pocky is available in various flavors like sparkling wine and Glico’s original pocky. Moreover, Men’s pocky and heartful pocky may be enjoyed by everyone with a sweet and dynamic tooth (International cocoa organization, 2018). This chocolate is not available in various flavors in the Japanese market. Kitkat Moleson is one of the biggest and empirical chocolate brands in the Japanese market. If people eat this chocolate then they are able to take experience of three combinations such as sour, crunchy and sweet in the international market (International cocoa organization, 2018). The competitors are targeting the kids and youngsters who like to eat chocolates for taste. Along with this, the companies also target those people who buy chocolates on some special events, occasion, and festival. 

Porter five forces analysis 

It is elucidated that Donald B uses porter five forces analysis in order to make a unique and effective image or goodwill in the minds of the customers. The porter five forces analysis for Donald B has been discussed below.

Entry of competitors: It is one of the biggest threats for Donald B while entering into the new market. The company has to deal with various rivalries in the Japanese market. The major competitiors including Meltykiss chocolates and Kitkat Moleson will affect the plans and policies of Donald B in the foreign market. These competitors are producing unique and attractive chocolate products in the Japanese market. Therefore, the company needs to focus on the plans, policies, products and strategies of the competitors while implementing the producing chocolate products in the Japanese market.

Threat of substitutes: The primary and significant threat of substitute of chocolate products is retail and supermarket own products which can also hamper the brand image and goodwill of Donald B in the Japanese market. The company needs to make unique and tasty chocolate in such market to distinguish its products from the rivalries.

Bargaining power of buyers: It is stated that bargaining power is high and unique in the hand of buyers globally. The price of the chocolate products is not much high for the Japanese but increased number of competitors who render similar products at reasonable prices could be destroy the financial position and image in the minds of the customers. Thus, the price needs to be considered by the company while producing chocolate in the Japanese market.

Bargaining power of suppliers: It has been found that bargaining power is large in the hands of the suppliers (Brinkman, Navarro & Harper, 2014).

Bargaining power of suppliers: It is noted that the bargaining power is high in the hands of the suppliers. There is high and stiff competition in the global market but raw material such as milk, flour, cocoa, nuts and some other ingredients are enough to satisfy the needs and requirements of the business and customers as well. Along with this, economies of scale are used and raw material and others resources are purchased to produce chocolate products internationally.

Competition among the existing rivalries: There are enormous competitors who are producing same products as well Donald B. The competitors may affect the profitability and success of Donald b adversely. The company needs to develop new range of chocolate products in the Japanese market for gaining competitive benefits (Beckett, 2011). 

Macro environment for Donald B 

The macro environmental elements influence the survival and growth of the firm. It is stated that macro environment factors may affect the targets and productivity of Donald B in the Japanese market. The macro environment factors cannot be controlled and managed by the company effectively and efficiently (Rothaermel, 2015).The firm needs to make unique and innovative strategies and policies to analyze and evaluate the external factors internationally. Pestle analysis is one of the significant tools or methods that can be used by the Donald B that have been discussed below.

Political: The political trends may affect fast food consumption like varying parameter food activities and food standards. The political factors including labor laws, tax policy, political stability, environmental law and trade restrictions. It is noted that the government of Japan is stable and strong thus, the stability of government may impact on the chocolate products in the country . The political components also include products and service which the government wants to offer or be rendered and those that the government does not want to be delivered. Aside this, government has great impact on the chocolate products because these products help in satisfying the needs and expectations of the customers internationally (Usui, 2014).

Economic factors: The economic elements include interest rates, exchange rates, economic growth, and inflation rate. It is noted tthat Japan is the 3^rd biggest economy across the globe with a total GDP of $4.9 trillion as of November 2017 (Rahman, 2018). Thus, it can affect the sale and profitability of chocolate products in the Japanese market. Along with this, if Donald B expands business in Japan then it needs to pay tax on the income they create in the country. Apart from this, interest rate also may affect Donald B cost of capital and thus to what extent a company grows and explores business internationally. Exchange rates also affect the supply and prices of chocolate products in the Japanese market. The fluctuating budget of the customers and their expectations also may affect the growth and revenue of Donald B. Apart from this, rising prices of raw material goods or products in relation to the demands and needs of source have economic impact on the suppliers. The company shall focus on the economic factors to provide chocolate products to the Japanese at reasonable prices (Porter, 2011).

Socio-cultural factors: The social elements include the cultural attributes as it also includes growth rate, age, career attitudes and population of the country. It is stated that cultural factors and trends vary as gluten free food and dairy products are becoming popular in the market. The Japanese people give more significance to such chocolate products in the marketplace. The chocolate products which are harmful to community must be prevented like food containing more sugar and fat. Apart from this, there is a pressure to reduce and eliminate these food products from the stores. In Japan, there is a trend of packed food items and box chocolates which help in maintaining a corporate culture in the country. Donald B needs to focus on the socio-cultural factors to struggle with rivalries internationally (Kimura, Mukawa, Yamamoto, Masuda, Yuasa, Goto & Wada, 2012).

Technological factors: It is analyzed that Japan is one of the biggest and most advanced technologically countries across the world. It is measured that Japanese are famous in seeking out learning to utilize modern and innovative technologies (Shin, 2013). It has been pushing technological innovation in an effective way that many countries would struggle and compete to emulate. Japan’s innovation could be found in a variety of fields internationally. Without innovative and advanced technology, Donald B cannot carry on its packaging activities and business in the Japanese market. The country uses e-commerce platform for expansion and development globally. It is stated that the company should focus on the biodegradable wrappers in the Japanese market (Kew & Stredwick, 2017).

Natural trends: The natural trends such as healthy, premium and flavors drive the chocolate and food industry globally. The natural trends could impact on the prices and features of chocolate products globally.

Demographic factors: It has been found from the various studies that demographic elements in the Japan more like to put direct and significant impact on the fast food and chocolate consumption (Grunert & Traill, 2012). The income level, choices, demands and interest of the customers also affect the profit margin and growth rate of Donald B in the country (Jung, Chan-Olmsted, Park & Kim, 2012).

Conclusion 

On the above mentioned study it is concluded that Donald B can grow and survive its business in Japanese market by analyzing and identifying the challenges, risks and issues of the market. Donald B is trying to explore and flourish the business in Japan to stand out against the rivalries internationally. Buyer behavior is one of the significant aspects that help in maximizing the sale of chocolate products in such market. In addition, micro and macro environment are analyzed and identified by the company before entering into the new market. It is evaluated from the above mentioned study that the company needs to differentiate its products from the competitors by using innovative strategies, policies and plans.

References 

Beckett, S. T. (Ed.). (2011). Industrial chocolate manufacture and use. John Wiley & Sons.

Brinkman, J., Navarro, I., & Harper, D. (2014). Unlocking the business environment. Routledge.

Copetti, M. V., Iamanaka, B. T., Pitt, J. I., & Taniwaki, M. H. (2014). Fungi and mycotoxins in cocoa: from farm to chocolate. International journal of food microbiology, 178, 13-20.

Ducki, S., Miralles-Garcia, J., Zumbé, A., Tornero, A., & Storey, D. M. (2008). Evaluation of solid-phase micro-extraction coupled to gas chromatography–mass spectrometry for the headspace analysis of volatile compounds in cocoa products. Talanta, 74(5), 1166-1174.

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Japaninfo.,(2015). The 10 best selling chocolates in Japan that will make a perfect gift[Online], Retrieved from https://jpninfo.com/35811 

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Mordorintelligence.,(2018). Japan chocolate market-segmented by product type and distribution channel-growth, trends and forecast (2018-2023)[Online], Retrieved from https://www.mordorintelligence.com/industry-reports/japan-chocolate-market 

Porter, M. E. (2011). Competitive advantage of nations: creating and sustaining superior performance (Vol. 2). Simon and Schuster.

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Rahman.M.,(2018). Pestel analysis of Japan[Online], Retrieved from https://www.howandwhat.net/pestel-analysis-japan/ 

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Santandertradeportal.,(2018). Japan:Reaching the consumer[Online], Retrieved from https://en.portal.santandertrade.com/analyse-markets/japan/reaching-the-consumers 

Shin, J. S. (2013). The Economics of the Latecomers: Catching-up, technology transfer and institutions in Germany, Japan and South Korea. Routledge.

Solomon, M. R., Dahl, D. W., White, K., Zaichkowsky, J. L., & Polegato, R. (2014). Consumer behavior: Buying, having, and being (Vol. 10). London: Pearson.

Usui, K. (2014). Marketing and consumption in modern Japan. Routledge.