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In part of this paper you “invented” information about your company. This is not acceptable. You will develop plans for your company and product during this course. You cannot “invent” information. Carefully review the grading spreadsheet below. Then review the example Marketing Plans provided to see what your paper should look like. You should also review course materials and class videos.

You did not include a Key Success Factors Matrix as expected.

Student

Shufang

Xue

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Industry Analysis

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260

ANALYSIS ON CHOCOLATE SOLUTIONS COMPANY

Shufang Xue

MASY1-GC1230 Strategic Marketing

Myron Gould

October 7, 2020

1.0 MISSION STATEMENT

1.1 mission statement

Develop unique, optimum customer experience from personal identity, creativity, and taste preference in chocolate products and syrup with different flavors, choices, and options.

1.2 rationale

Personal identity

To develop refined products that reflect the personal preferences and needs of the customers. The chocolate syrup is a sauce that works as a topping and sometimes as a flavor in desserts, milk, and a milkshake. The US chocolate market has a unique culture where chocolate products are vital sources depicting love during Valentine’s Day, a treat for children during Halloween, and other memorable events in individuals’ lives. In this regard, chocolate solutions include customer’s preferences as part of their standardized production process. This process will allow chocolate solutions to embrace the different variety of chocolate product design based on practical and time tested market preferences. The customers will play a significant role in this platform. The process will involve personal opinion as responses or feedback on the sampled chocolate product designs to preserve their identities.

Uniqueness

Chocolate solution will play an essential role in its production process, which will involve the development of chocolate products that will only signify the firm’s brand presence. The firm’s confectionery designers will apply modern technological revolution and innovation to meet diverse customer’s needs. Chocolate solutions end product will signify superior quality and embrace the unique and rare modern chocolate brand design.

Connection

Chocolate solutions want to create a reliable relationship with their market by precisely defining their role from the known chocolate production firm to the unknown creative capacity. Chocolate solution artistic designs and the creative recipe will demystify human experiences, connections, and relations from perception, desire, thoughts to the reality presented in the chocolate brands.

Customer Experience

The chocolate solution aims to be among the best chocolate producing companies owing to its purpose of delivering unique chocolate brands with a mix of creativity and thoughtful design that is diverse from the trending modern twist in the chocolate market. It is also part of their goal to give all their customers the desired quality services with depict value for money.

2.0 INDUSTRY ANALYSIS

2.1 Industry Code

Industry NAICS code:311351

Title: Roasting, grinding, and shelling cocoa products

2.2 Industry Description

The US confectionery industry entails sweets, chocolate gum, sugar cookies, and gummies. This industry comprises an establishment that primarily engages in roasting, grinding, shelling cocoa products, and confectioneries. Further, the sector also involves chocolate instant, baking chocolate, chocolate coatings, chocolate candy, chocolate syrup, fudge, confectioneries, and granola bars, all made from cocoa beans.

The US takes 70% of the North American market share volume; This inclining market share is due to the high demand for quality cocoa products and premium chocolate sales in the North American market. According to the North American Confectionery Market forecast, it estimates its 2019-2024 to be at CAGR of 5.4%.

2.3. Industry Overview

The US confectionery industry has been a recipient of a steady rise since 2014. According to Euromonitor’s forecast, the 2014 growth was at 6% with this growth is expected to continue despite minimal economic disruption. The increasing development in demand for US chocolate and confectionery is attributed to propelling demand in the market from health-conscious consumers. Moreover, chocolate consumers’ accelerating growth has come with significant changes as consumers are shifting to healthy snacks that require the market players to embrace diversity and innovation in their product portfolios. Thus, market players respond to these market trends by introducing healthy snacks like dark chocolates and protein-rich chocolate bars. These refined chocolate products come with low sugar content while maintaining a higher percentage of cocoa and chewing gums.

Further, the US confectionery industry is expected to grow by 44% from 2016 to 2025. This growth has only been affected by a small decline in 2018 revamp back by the middle of the year. The US confectionery industry’s growth is estimated to be the source of global record revenues of $117 bn. In 2016 the US confectionery industry was estimated to be worth $36.4 billion while chocolate products were estimated at 17.6 billion with anticipation to gain traction within the forecast period. According to these estimations by the National Confectioners Association, the 2018 chocolate sales amounted to a whopping $21.1 billion, over 60% of the confectionery industry. Similarly, the confectionery industry forecast anticipates the industry to surpass the 2025 estimated forecast of at 52.6 billion industry value.

Table 1

2.4 Industry Current Situation

The US confectionery US industry is currently facing increased consumer growth driven by increasing awareness of specific health benefits derived from the consumption of certain types of chocolate both locally and globally. With consumers gaining information and practicing healthy dietary measures, market players are keen to observe consumers shift to healthy chocolate products and respond swiftly to developing healthy chocolate products to meet the surging demand. These healthy chocolate products and chewing gums range from rich protein bars, dark chocolates containing low sugars and a high percentage of cocoa. However, attempts to meet the demand for healthy chocolate products are poorly matched against an unpredictable supply.

This effort to increase cocoa content is facing the right motivation for declining cocoa prices within the international market. At the same time, further inspiration is steered by the perception that chocolate consumers are substantially priced insensitive. However, in rare circumstances, consumers might be willing to purchase products they presume to be affordable luxury.

Further, the industry growth is attributed to market players’ motivation efforts to invest in R & D in efforts to ignite innovation, re-branding and improving brand image. Innovation and re-branding in market players’ product portfolio are among the responsive measures to respond to conscious consumer demands for healthy diets.

The US confectionery industry’s primary challenge is novice strategies to exploit this boom for continued volume growth, sustainability, and profitability faster than to alternative competitive markets such as Europe and Asia. According to the chocolate industry’s global tour, some indicators depict that the industry’s future should also anticipate significant challenges. The further immediate concern arises from the balance between the cocoa supply, primary raw material in chocolate production, and the industry’s demand. With several manufactures trying to confront this issue with strategies that involve investment in higher yield cocoa beans.

Significant improvements in the industry are the positive signs of sustained recovery of the global economy. With the anticipation of growth in primary markets such as Brazil, China, and India, there is potential and long-term growth in the emerging economies. Further, the industry aims to attain sustainable improvements in its primary operating margins and strategic decision-making to choose the right investments. Similarly, the industry looks into developing investment capacity through acquisitions, R&D, supply chain management, and marketing as a measure to seize significant benefits from the importunity that prevails.

2.4 Trend Analysis

Preferential Healthy Products

Consumers shift to healthy chocolate products from dark chocolate to rich protein bars with rich antioxidant content. The growth of this product niche is at 8%, while premium product growth is 11%.

Distribution channels

In terms of sales, research indicates that the grocery stores are the largest sellers of confectionery products, followed closely by mass merchandisers outlets and convenience stores. On the other side, confectionery stores lag in terms of their sales as they make up only 5% of revenues. Although their sales are low, they are typically involved with higher quality niche products whose popularity has been on the rise lately.

Seasonal demand for confectionery

Consumption of chocolate products thrives from a seasonal market where chocolate products’ consumption thrives when the county marks memorable events and ceremonies. Similarly, there is high consumption of chocolate products on an individual basis during family events or festivities, non-seasonal. National events range from celebrating national celebrations to specific family, relationship, and corporate functions.

Strategic Alliances

With companies trying to improve their market share and penetrating, market players are undertaking integral steps to arrange mutually beneficial projects. These projects mainly retain their original independence but with less binding terms than a joint venture to pool business resources. For example, notable strategic alliances involve Barry Callebaut, a world-leading manufacturer in chocolate agreement with Hershey’s Hershey’s Company. The deal will also present a mutually benefiting strategic R&D partnership, which is a drive towards innovation. From this partnership, Hershey Company will outsource liquid chocolate from Barry.

2.6 Five Force Analysis

To analyze the company’s market, porter’s five forces model will be vital in assessing the Confectionery industry. The chocolate solution incorporated in 2020 as a chocolate syrup manufacturer a sauce that works as a topping or flavor in desserts, milk, and milkshakes. The largest market for product supermarkets, coffee shops, and cafes. There are constant changes in the market as people are currently focusing more on healthy living and eating, thus pushing off the market. The changes in the market have also come along with opportunities (Crompton, 2020).

The chocolate syrup has different flavors, choices, and options, which increase the customers’ buyer power. Several brands also offer the products and sometimes better in quality, thus making the competition stiffer. Moreover, key players in the market have dominated the market, such as the World Cocoa Foundation, the international cocoa organization, and Nestle Switzerland. The competition becomes more challenging because the other companies have already won over their market base Crompton, 2020).

To grow its market, it has to face anticipated risks in its product launch and commence its strategy to widen its market. Large companies such as Hershey’s company launched a new brand identified as Hershey’s Cookies and Chocolate Bar. This leads to financial costs and risks; however, the company is likely to thrive despite the challenges as it has a significant market share. For the upcoming companies, this poses a threat to stiff competition. The revenue from chocolate has been continuously growing because, in 2014, there was an increase of 2.9% from 2013. Sales grew by 6% in 2017. There is a bug market as the products are also diversified into sweets, candy, toppings, powder, drinks, and different types of chocolate Crompton, 2020).

Buyer power

Despite the high buyer power, the supplier power is low as they are sourced from small family farms. Also, there is the issue of outdated farming practices that limit the rate of supply. The supply of raw materials is low. Yet, there is a challenge brought in by the dominating companies as they buy the raw materials at low prices, thus minimizing the farmers’ bargain power. Moreover, the countries that produce cocoa, such as Ivory Coast and Ghana, have political instability, which often disrupts the production. The flux cuts down the supply rate, making it challenging to stabilize despite moving to other politically stable countries. Besides, farmers are skeptical about the plant due to its maturity period of close to five years. The period is considered too long to invest in and wait without earning revenue that is not sure. Also, a forecast shows that cocoa production is likely to go down over the years Crompton, 2020).

Threat from substitute products

Threats also face the industry as there is a substitute for the products, thus giving the client a wide variety. The substitutes are not necessarily chocolate products but alternatives such as maple syrup, which are sometimes cheaper. The affordable products win over the market faster than the original chocolate products, making the competition stiff. Frequently, new entrants come in, which poses a threat to the industry as competitors. The new entrants have a challenge getting into the market as there are key players such as Hershey’s company. Large companies have a lot of capital to invest in marketing strategies, such as advertising on different channels. Also, large companies’ production cost is low as they attain the raw materials at a low price, thus making more enormous profits.

New entrants

On the contrary, the new entrants come in with low prices, generic and premium sectors left out by the dominating companies. The use of short pricing strategies wins over more clients and retains some. Therefore, brand loyalty is divided among many players (Cocoa Market: Economics, 2020).

Competitors

Competitors have a low level of rivalry as there is a high regard for brand equity as every client purchase product as per their preferences and tastes. Brand loyalty is also identified in this area as the customers attain the desired outcomes according to their most familiar brands. The leading players had won over the entire market as they provided low prices and delivered hog quality products for the clients. The dominating companies also possess brand awareness, which boosts the rate at which the clients buy and access the products (Cocoa Market: Economics, 2020).

The industry also has an opportunity to grow and do well. The opportunities are on the rise because of products such as drink fountains and recipes that can be used. Also, the upcoming companies are aware of the areas to target clients to gain their attention. For instance, the forthcoming companies provide a different experience for clients, such as Kulwin’s chocolate and ice-cream company makes handmade chocolates and original ice cream. The use of these kinds of techniques makes it possible for upcoming companies to break through the market. The forthcoming brands have unique products, and consumption is many for the clients to choose from and return to get a better or similar experience. For instance, in the Asian Pacific countries, the consumers are continually adopting western tastes, which have led to a change in the area’s tastes and preferences. Therefore, chocolate consumption continues to grow and expand, thus pushing for growth opportunities in the sector (Cocoa Market: Economics, 2020).

Hence, applying the porter’s forces in the chocolate industry review, it is evident that there is a change in the market due to several things, such as the rise in the desire for healthy living. People are adopting a healthy lifestyle, making chocolate lose a part of its market due to the same. Several brands produce the same products but in different flavors. The variety of products also gives the clients a lot to choose from other than prominent brands. The combination of effects makes increases the buyers of the clients. There is a constant growth of competition in the market. The dominant companies have taken over a large share in the market, which stiffens the growing companies’ competition. The stiff competition pushes the companies to invest in several brands to gain profit and get more clients.

Supplier power

The raw materials’ supply is also wavering as the source is from the small-scale farmers who do not invest much in the cocoa trees. The primary source of cocoa that includes countries such as Ghana is politically unstable, limiting their production rate. There are also threats in the industry as there are substitutes and entrants. The entrants who are the new companies have difficulty moving forward as the market is dominated. In contrast, large companies face a challenge from new companies as they offer more affordable products. The leading players largely depend on brand loyalty and brand awareness, while the new companies rely on the niche they cut in the market (Cocoa Market: Economics, 2020).

2.7 KEY SUCCESS FACTORS

Wit several factors that can be put into consideration as the critical success factors. The following factors listed below represent the key areas that the Chocolate solution can thrive in this market.

Materials Usage: The most commonly used product in the production of chocolate products is cocoa. As physical bean quality directly influences been performance in a bar of chocolate and its flavor quality. Cocoa Beans suppliers and producers have guaranteed high development standards in their packaging and storage process. Chocolate and Cocoa Industry Quality Requirements (COABISCO,2015) will ensure that the processing activities play a prime role in expressing genetic flavor potential that determines the beans’ use post-harvest. Further, the industry quality assessment has developed a harmonized international standard that ensures correct consignment classification to provide adequate cocoa bean documentation.

Design & Innovative Packaging: Chocolate design embraces innovation in their production strategy to develop unique, quality confectionery from research optimizing ingredients, new chocolate taste experiences, premium, health, and wellness chocolate products. Further, in terms of packaging, creative chocolate packaging design carry a significant weight to depict the quality and flavor ingredients in the chocolate, which can be easily identified by consumers and differentiated from other substitute products. Innovative chocolate packaging is considered a driving force in the industry with the availability of numerous packaging designs from Snack Size Chocolate Bars, Novelty Chocolates, Gift Boxes, and Sugar-Free Chocolates.

Brand Reputation: Brand reputation is used as a critical strategic factor in the confectionery industry. Customers must be aware of the brand for their willingness to consume their products. As such, knowledge of the brand leads to consumer experiences through sampling the firm’s products. From consumer experiences, brand loyalty, consumer satisfaction, and image development can be attained. These factors can drive sales, profitability, and investment in brand activities crucial in maintaining a competitive environment as it allows consumers to build a long-lasting relationship through their loyalty. Through different brand information sources, firms can receive data from consumer experiences and positive feelings to convey their satisfaction with a brand. Similarly, promotion services are also remarkable strategies for building brand awareness.

Technology Development: Technology is considered one of the driving forces in the chocolate industry as companies form strategic alliances to gain a competitive advantage in the market. Through innovation and R & D, firms can respond to health-conscious consumer demand for health and wellness products that require swift response through the innovation process to meet the inclining demand for healthy chocolate products globally.

Premium and Seasonal products Expansion

The US chocolate and confectionery industry thrive from the availability of premium as well as seasonal chocolate. The sale of low-quality chocolate is declining due to the preferential market for premium chocolate. Through innovative flavors that act as drivers in this market, chocolate firms are shifting towards developing premium products whose demand in inclining is based on a continuation.

Health Concern

The US and North American consumers are health conscious and well informed due to their healthy living and diet practice. Thus, this conscious health market demands chocolate products with organic and low sugar content, which is restraining growth in the industry. However, this challenge is an opportunity for companies to embrace innovation and develop organic and dark chocolate products associated with low sugar.

3.0 COMPETITOR ANALYSIS

3.1 Summary

The United Chocolate and confectionery industry are highly fragmented with both local and international based companies. As part of the North American Chocolate Market, this market is segmented based on; Type from Milk white chocolate to Dark chocolate; Product from selfiness, courtliness, softliness, boxed assortments, seasonal molded chocolates, and others.

Distribution channel

Chocolate solutions will use the following distribution channels from( Hypermarkets, Supermarkets, Convenient Stores, Retailer, Online Retailers, as well as Other Distribution Channels; and Geography which relates to both local and international markets.

The US Chocolate Industry has several players within the North American Market. Different companies in this industry are the reason for stiff competition aiming for growth and expansion synergies. Therefore, this section aims at analyzing the competitors in the industry.

3.2.1 Cadbury

Cadbury is one of the prominent companies producing chocolate. It is known for dairy products such as milk bars and is part of the Mondelez International company. In the year 2010, the company made a total of 18.9 billion dollars. Around the world, the company owns the most significant share of the global market for chocolate. It holds the most significant market share in regions such as the Asia Pacific, Africa, and European countries. It has the lowest percentage in North America as it comes number five in the market. Many other companies around the world pose a threat to Cadbury (Wynter, 2016).

3.2.2 Mar’s Wrigley’s

There is also a company known as Mar’s Wrigley’s company, which is popular due to its name and the fact that it is a private company. It won a market share of up to thirty percent in the United States in the year 2018. It has a brand such as M&M’S, Starburst, Twix, and Skittles. It was rated the sixth-largest private company in the United States in 2019. Besides, it competes in six areas: chocolate, pet care, food, Wrigley’s gum, drinks, and symbioscience. In the year 2008, the company acquired 23 billion dollars with which it gained control of strong brands such as orbit and Eclipse that boosted sales by up to a 5.4billion dollars. or every member. One of their primary marketing strategies was using the health diet by promoting ideas brought in by the WHO against too much sugar. Therefore, their products are focused on the clients’ welfare as they produce products low in calory.

Moreover, the company ensures a lively social responsibility by investing in local markets such as the seventy billion dollars invested in the local supply chain in the year 2017. Moreover, they are dedicated to giving new jobs to the local US citizens catering to every citizen. Employment and investment in the local people ensured that the country made the products locally and won more clients and awareness (Williams, & Williams, 2017).

3.2.3 Hershey’s

Hershey’s company is also famous as it owns a forty-four percent market share in the United States. It owns several brands such as Hershey’s, Reese’s, Jolly Rancher, and Twizzlers. Over eighty percent of its revenue is sourced from the market share in North America. The company is focused on its supply chain in the future as they do not stop checking and correcting their product lines, making new plans, and developing their market strategies. Some of their goals push their continued growth as they aim at increasing access to health and nutritious food, control and eliminate child labor, empower women, and increase the growth of cocoa. The company also owes it to great advertising strategies such as micro-marketing, which customizes the services to fit the clients’ small numbers. Through micro-marketing, they aim to give the clients a wide range of variety by giving more products. They also offer services such as designing weddings, baby showers, birthdays, and holidays. They also apply the holiday marketing strategy, which works for advertising their products over the holidays by customizing a theme for each holiday. They also have ad campaigns, which gives emotional stories to reconnect with society and their companies (Onwuka, 2017).

The firm also uses promotional tools in its marketing, which involves exploiting social media to different market products online. They use platforms such as Facebook and Twitter. Statistics indicate that Hershey’s company has more than 8,840,417 followers on Facebook, more than 37,000 followers on Instagram, more than 38,000 followers on Pinterest, more than 5,000 followers on Twitter, and more than 10,000 subscribers on YouTube. Therefore, the company benefits not only from loyalty but also from constant brand awareness.

3.2.4 Nestle

Nestle company also stands out as a competitor as it is the biggest food company around the world. It engages in different market sectors, but the chocolate market has over 10% of the market. It was rated number six among the largest companies in the United States in 2019 as it made a global sale of 7.9 billion US dollars. In the same year, the company sold products worthy of six billion, with 2.5 billion dollars from only the American market. They focus on baby food, bottled water, cereals, chocolate, coffee, dairy, frozen food, drinks, food, health, nutrition, and ice-cream. To win over the market and gain brand loyalty, the company uses its distribution strategy. They ensure to reach the end consumer, thus eliminating the middlemen through the network of distribution. They also apply the muti-channel strategy to bring the products to the consumers and clients. They also major on brand equity as they ensure to brand their products on their own to ensure there is brand awareness. The company also gained its understanding through the KitKat brand’s production, which became popular among adolescents as it is made of chocolate and wafer. The brand is delicious and liked by many thus;, the company has been continuously growing (Onwuka, 2017)

3.2.5 Lindt & Sprugli

Lindt & Sprugli also has a large market share in Europe and North America. Statistics show that more than forty percent of sales of the company came from North America. In the year 2019, the company made a total of more than four billion dollars. There has also been a constant growth in sales since the year 2013. Product strategy is one way the company markets its products as it gives chocolate products and seasonal confectioneries and sweets. The products are innovative as they have a ribbon on the rabbit’s neck, depending on the flavor of the product. They also focus on holidays such as Christmas as they focus on using Santa, snowman, and bear bells to market their products (Llobet Fábregas,2019).

3.2.5.1 Pricing Strategy

Pricing strategy is also crucial to Lindt company as they give higher prices for better quality products. Moreover, the company has better leadership, which separates the company from its competitors. Reports indicate that the company has made a profit of more than twenty-five percent over the last seven years. The pricing is made in a way that the company makes desired profits but affordable to the clients. The pricing strategy has opened opportunities for them in China and India (Llobet Fábregas, 2019).

3.2.5.2 Distribution Strategy

Distribution is also a strategy applied as they appreciate a technology that cuts down the time taken to produce chocolates by almost ninety percent. Also, more than 80% of the sales occur out of the home country as they have stores in the countries they distribute. For instance, they have expanded into the United States and the European Countries. They also take online orders and use subsidiaries who ensure a smooth supply chain for the distribution of the products. For instance, presently, there is an investment in more than one hundred countries globally. The distribution channels reach four continents. Therefore the supply chain is vital, which sustains their continued growth (Llobet Fábregas, 2019).

3.2.5.3 Promotion and Advertising Strategies

The company also takes parts in promotion and advertising as they use both print and digital advertisements. They use posters, displays, and shopping centers around the world. They also use broadcast that is videos through TV channels to create brand awareness. Moreover, in areas such as the airports, they have setups to contact clients directly and have good publicity (Llobet Fábregas, 2019).

Thus, the chocolate industry competitor is vital as they have been in the market for long. Also, they have a significant market share, which has given them a strong brand loyalty. These companies also have great advertising and management strategies that help in growing and expanding their markets. For instance, there is the use of social media marketing techniques where they gain followers and publicity. Some also capitalize on the distribution as they can reach a large number of people. Some companies use innovative strategies to win over their clients. Social responsibility is also a strategy used as the company focuses on the welfare of their client’s nutrition, making it easy for them to win over more clients. Every company has strategies that help expand, but each has won over a large market share (Llobet Fábregas, 2019).

MACRO CHALLENGES

4.1 Macro Challenge #1

4.2 Chocolate Solutions will start its production process in Chicago and will be selling directly through its online platform and distribution channels from Hypermarkets, Supermarkets, Convenience Stores and Retail Stores, Cafes, and Restaurant

4.1.1 Rationale

Chocolate Solutions will start its flagship production process in Chicago, which will be the main act as its official headquarters and production site. The firm will use direct selling on its online platform and distribution channels as its main point of sales. Direct selling through online platforms will entail free delivery to Chicago based residents with referrals to nearest distribution channels for clients in its online platform from far distances.

Distribution channels will play an essential role in meeting target clients who are loyal customers in the named distribution channels situated in strategic business and geographical setting accessible to target consumers. Direct selling will generate maximum benefits for Chocolate solutions. It will benchmark the market demand for its products before rolling out its production process to meet the nationwide demand for its products.

4.2 Macro Challenge #2

Chocolate Solutions will sell and manufacture 400,000 units of liquid chocolate in a year.

4.2.1 Rationale

Chocolate Solution’s ultimate goal is to improve its sales amidst the booming chocolate market. As the firm targets to produce approximately 400,000 with an average price of chocolate products per unit at 2.75$. These projections indicate that the chocolate topping and product sales revenue by the end of the fiscal year. Majorly the firm will rely on an advertisement from customers’ experiences and satisfaction levels on its online and distribution channels. Within the first year of operation, the firm is expected to generate $11,000,000 in revenue. Unlike other major players in the industry, such as Hershey’s, with a superior brand image and reputation, help the firm attain its revenue projection. Therefore Chocolate Solutions will strive to excel by responding swiftly to customers’ concerns to meet their target demand. Correspondingly, social media influencers will be used in advertising through its online platform to depict their customer experience using Chocolate solutions products from topping and sauce made from different flavors.

4.3 Macro Challenge #3

Several challenges face the chocolate industry due to inconvenience caused by the dying supply chain. It is difficult for companies to sustain a stable supply chain as they are slowly withdrawing from cocoa farming. With large companies sourcing their raw materials from small-scale farmers (Perez et al. 2020). The cocoa production process involves removing cocoa beans from the pods, fermenting, and drying the beans. These beans are then packaged and shipped to the companies such as Chocolate solutions, which in turn end up manufacturing different types of chocolate products. With this process taking more prolonged, and so does growing a cocoa plant to maturity.

Instability in cocoa product prices had also been quite a stumbling block in the cocoa product supply chain, with the North American market facing a surge in Cocoa beans prices a significant issue in 2017. Consequently, due to the effects of exhaustion of limited natural resources(Perez et al. 2020). Limited natural resources have led to a high deforestation rate, with environmental policies against deforestation limiting the percentage of cocoa production. These effects in tandem have to disruption in cocoa supply. With the disruption in cocoa supply, the created massive demand for cocoa beans results in prices in the supply chain, which is only advantageous to large companies.

4.3.1 Rationale

As the chocolate and confectionery, the industry faces challenges from the inconvenience and disruptions resulting from the dying cocoa supply chain. This process careful selection of reliable cocoa suppliers. Further assessment of the cocoa beans’ quality standards and its genetic richness determined by the raw material preservation and packaging will also influence the production of high-quality chocolate products.

Chocolate Solutions will build a strong relationship with its supplier of cocoa, which is the primary raw material in the production of chocolate toppings and products. Thus, the firm will embrace developing long-term and sustainable contractual relationships from suppliers’ cocoa products, ingredients, and flavors. The firms will be active to ensure that there will be no disruption in its production process, thus enter into contractual agreements with its suppliers that lapse a period not less than six months. These contracts will optimize the firm’s capability to meet its target demand from consumers to enable the firm to establish stability in its operation as a going concern.

4.4 Macro Challenge #4

Health has become a significant concern for most people, which has posed a challenge for the chocolate industry. As the companies strive to bring in a variety of products, the companies are expected to follow up with making food products. For instance, there is a limit on the amount of sugar added to chocolate to reduce health risks such as obesity and diabetes. People are also adopting a sugar-free diet, which creates a need for companies to use dark chocolate to produce different brands. Also, the cut in the use of sugar has reduced the rate of consumption of the latter. Thus the sales have also been affected. A conscious check of the diet expects the companies to invest more in healthy diets, which needs financial investments to ensure the brand does not lose its quality and value. Advertising the newly made health-conscious products also strains the companies financially as most have invested in other brands. Moreover, due to the changing trends in health, uncertainty is a challenge as the manufacturers are unsure of new or upcoming trends (Perez et al. 2020).

Chocolate Solutions will embrace innovation to meet the changing demand from chocolate consumers based on their health concerns.

4.4.1 Rationale

The firm will ensure that its production team has both quality and expertise to meet the diverse demand for chocolate products from the various market niche. First and foremost, the Chocolate Solution will have to respond to the current market trends that have seen an inclining demand for healthy chocolate products. The firms will shift focus to innovative designs through R&D to develop chocolate toppings and products from the organic, low sugar content, and dark chocolate rich in antioxidants developed from various flavors.

5.0 Macro SWOT Analysis.

5.1 SWOT Analysis for Macro Challenges

5.1.1 Operation

Chocolate Solutions will have its production process based in Chicago and will be selling directly through its online platform as well as distribution channels

For future planning, a swot analysis must be taken to ensure that investors are aware of their strengths, weaknesses, opportunities, and threats.

5.1.2 Strengths.

Clients demand quality products and food. Clients are often looking into the products they are attaining from the stores and cafes. Notably, there is a need for the production of good food for consumers. For instance, the clients are always looking into the ingredients used to prepare food before eating. They also look for the sources and transparency of a brand. This is a strength because the upcoming and new companies have areas to focus on and deliver quality products for their clients. Chocolate consumers want more of dark chocolate than the other chocolate types as it has less sugar. This strategy is part of the firm’s strength enabling the firms to develop a variety of high-quality chocolate products using dark chocolate (Zaman, 2019).

Most companies also match the popular trends of the season. For instance, clients want food that is gluten-free, dairy-free, vegan, and not Genetically Modified. Therefore, companies focus on ensuring that the products serve the needs of their clients. It is also a strength as consumers are willing to spend more money on the products they feel are of good quality; therefore, they should maximize the same (Zaman, 2019).

It is a field full of professionals as there are people who check for the products’ dietary state and check the requirements of the products. Therefore, being in the industry, it is easy to get relevant help and guidance in the expansion and growth as desired. The government and the non-governmental organizations are also involved in ensuring that the products are of the right quality. The regular assessments ensure the company’s reputation is maintained, and the clients trust their brands (Zaman, 2019).

5.1.3 Weaknesses

One of the weaknesses is the stiff competition in the market. The dominating companies have tapped the larger share of the market, making it hard for the upcoming companies to rise. The broad markets have a strong brand awareness and equity, which causes a challenge in the new brands’ reception. The new brands strive to bring out quality and unique products that allow them to sell, but they cannot keep up with competition from the larger companies. However, the smaller companies have increased competition from the large companies that offer quality products at lower prices through which they win over clients from the dominating companies (Zaman, 2019).

The constant changes being encountered, such as the change in flavors, pose a financial challenge to the startup as they cannot keep up with demands. Also, most of them have one line brand that makes it make the desired amounts of profit as the larger ones possess several brands. Therefore, it is a weakness for the company to diversify into different brands. There is also a weakness in this industry, as there are several regulations that govern the production. For instance, the supply from countries like Ghana is associated with deforestation; thus, the constant output is a challenge. Besides, small companies cannot sustain the demands of the supply chain as they lack adequate funds. Besides the changes in diet, many consumers do not find value in the quality chocolate and are unwilling to spend money on the latter, thus making it a challenge to invest in the same. Attaining the production materials such as the machines makes it hard to produce as the equipment is expensive. Competing with a company that has already established itself thus becomes difficult. Startup companies also lack the right advertising Skills, which makes it challenging to get high brand awareness. The company has not made proper use of the marketing strategies that would help expand the company (Zaman, 2019).

5.1.4 Opportunities

There are several opportunities, such as the Business to Business opportunities for the company to use and grow. Clients are in demand for high-quality products, which creates an opportunity for the company to grow and expand. Due to the current market for quality, providing quality products opens up opportunities to break even. Often there are businesses such as Cafes and bakeries that produce cocoa products such as chocolate. Therefore, connecting with such a place allows the company to expand and make more profits.

Moreover, there aright distribution channels that the company can use to take advantage of this platform. In this field, the distributors desire to have the products in demand on their shelves to ensure that they deliver once needed. Some retailers deal with chocolate products, an opportunity for the Chocolate solutions to work with (Zaman, 2019).

Social media is also an excellent opportunity for the company to get the desired exposure to reach different clients and people. Through social media, the company can attain brand awareness and loyalty. It is also an opportunity to market and promote the products as they reach more people. Broadcasting is also useful and works as an opportunity for the company to expand and gain more clients. Consistency online makes it possible for the company to identify and utilize opportunities. The chocolate industry has excellent room for innovation through which the company can grow and create its niche (Zaman, 2019).

5.1.5 Threats

Several threats face the chocolate industry as the new changing trends might negatively affect the company’s growth. Adapting to the recent change might cause the company to slow down in the activities. Also, there is a high demand for skills for people needed to take part in the latter’s fulfillment. The company requires more capital for investment to keep up with the changing trends that can be challenging to attain. There is also a high demand for a variety of products that require financed and equipment to produce the best kind of brands (Zaman, 2019).

The government regulations also bring a threat to the companies as they need to stay updated with the government’s expectations. They are also expected to adhere to the expectations to keep running. Maintaining the regulations can be difficult, especially if a company is not making the desired profits. Therefore, these companies are continually threatened. The future is also uncertain due to the changes occurring frequently. Some years from now, the equipment being used might become obsolete, leading to more costs. Also, the flavors being produced currently are likely to change over time, challenging to outpace. These threats put the company at risk of being out of business in the next few years (Zaman, 2019).

6.0 Market Segmentation

6.1 Macro Market Segmentation 1

“People who are health conscious” thus require unique products from gluten-free, sugar-free, low sugar, organic, and oxidant rich chocolate products.

6.2 Micro Segment #1

6.2.1 Luxury and Prestige

The high social class that wants to experience luxury from the consumption of high premium products.

6.2.2 Demographics

Male/Female

Age from 20-45.

Annual salary ranging 20,000-500,000

6.2.3

low sugar content.

6.2.4 Position Statement (Organic products)

Those who practice or at a strict diet due to their profession and thus prefer organic products.

6.2.5 Geographic

Individuals who can access Chocolate solutions products in outlets within Chicago and the town outskirts.

6.3 Micro Challenge #1

The luxury and Prestige market segment will be introduced to the Chocolate Solutions products in shows, galas, and events. Within these events, free samples, direct selling, and sales promotion will be taking place interchangeably. Customer experiences and satisfaction will be assessed after the consumption of the products. Similarly, this elite group would be encouraged to use the online platform to represent their views, thus increasing traffic on the Chocolate Solutions website.

6.3.1 SWOT Analysis of Micro Challenge #1

The firms will be involved in at most five events, galas, exhibitions, and expositions to introduce the product and expose and spread the brand image and reputation towards the public (high social class).

Positive Strengths

Creation of intense connection with the elite/high-class group through a range of products representing prestige or moral status.
Creates non-seasonality in product offerings as chocolate solutions meet the demand for the upper class who do not depend on seasons to purchase items.
Reliable market base that would result in substantial financial support in line with current demand surge for healthy products.

Positive Opportunities

Innovation opportunities in product design to meet different quality tastes and preferences.
Creative packaging design that is not only appealing but depicts high status and luxury.
Health-conscious consumers who would require and ensure limited proportions of chocolate products from sugar content to ingredients and flavors.

Negative Threats

Increase in innovation and R&D due to unstable product design, which influences the production cost.
High preferential treatment to healthy products might limit consumption patterns.

Negative Weakness

Lack of recognition due to dominant brands, which are the major market players.
Decreased willingness to launch new products following the current trends on healthy products.

6.3.2 Rationale

At each of the events, the firms will aim to attract a maximum of 50 prospective clients to sample their products. These 50 clients will also involve members who can consider buying the products after testing the product. Similarly, sales promotion will also be part of this event to attract the laggards who might be tempted to attractive value for money.

Through sales promotion, clients will be better positioned to sample the chocolate solution products from chocolate bars, fudge, white chocolate, and chocolate toppings. From these events, esteemed views of the customer’s customer satisfaction can be generated. To assess the prospective clients’ views, there will be interviews and question answering to pick on their opinions among the sampled products.

To eliminate failure and avoid failure in these events, the firms collaborate with shows and events organizers within the different top-notch restaurants and high-end bars to ensure that it meets the right target market for its prestigious products. Thus, these events will go in hand as chocolate Galla, therefore, attract the chocolate lovers among this class in the market segment.

6.4 Micro Challenge #2

Demographics market will involve all the individuals in the society from low to the middle class who have a preferential taste for different chocolate products. This market will require a marketing strategy that uses influencers from online and direct selling platforms in distinctive and renowned shopping outlets.

6.4.1 SWOT Analysis for Micro Challenge

Positive Strengths

The influences will be an important public figure whose esteemed excellence in their discipline would steer Chocolate Solution sales due to respect and admiration from the public.
With the presence of influencers, brand ambassadors, Chocolate Solution brand reputation, and image will improve.
With the middle class making the majority of the general population, their views and response from customer experience and satisfaction will be vital.

Positive Opportunities

Chocolate Solutions will benefit from influencer’s presence to attract prospective clients.
Product promotion activities at re-known outlets will be easier to manage as the destinations are flocked with customers who go to purchase different products and services.
Promotion events in established outlets like hypermarkets, supermarkets will not increase sales from the already loyal clients of respective shopping outlets.
social media will also be an essential avenue for the influencer to build Chocolate Solution’s brand image and reputation, which will improve the firm’s market presence

Negative Weakness

Lack of product support due to the dominance of the prominent market players.
High cost on promotion at different outlets within the country will be costly.

Negative Threats

Lack of consumer willingness to try new products.
Imitation from major players do develop a product portfolio like Chocolate Solution’s
Covid -19 restrictions would create reliance on the online platform would mean less direct contact with prospective customers.

6.4.2 Rationale

The firm will involve an influencer, probably a prominent personality, to be the brand ambassador for Chocolate Solution. With a famous collaboration personality, the firm will attract both prospective clients and the individuals who adore the central character.

Both sales promotion and direct selling will be offered as alternative prospects. Customers will be present in both the online platforms and shows, which will be a massive benefit for the firm.

Influencers will also use their colossal influence to encourage their followers to like the products they support. Through such solidarity, influencers will improve sales and interact with the public to understand their perception and satisfaction levels from consuming a particular brand. Thus this avenue is effortless as both interaction and feedback can be directly undertaken by influencers and firms customer care to respond to client responses.

The firm can prevent product failure by offering price competition with dominant market players but generate quality products. This strategy will eliminate the chances of loss of product introduction and direct selling. Similarly, the high cost of promotion might not be avoidable in the short run but can be recouped once the product develops its market niche.

6.5 Micro Segment #3

6.5.1 Prospective clients for organic products

Prospective clients for organic products will entail consumers who cannot consume inorganic products due to health reasons or discipline.

6.5.2 SWOT Analysis for Micro Challenge #3

Positive Strengths

Generation of alternative products for prospective and new clients.
Shifting client demands from not only consuming to healthy conscious consumption.

Positive Opportunities

High R&D process will be essential in developing various alternative chocolate products.

Negative Weakness

High cost incurred in R&D.

Negative Threats

Response by market players to develop a product similar to the firm.

Product

7.1 Product Ideas and Objectives

Chocolate products are categorized by type, work, and can be included in the cake bakery and the development of other premium products. The chocolate product consumption is not restricted to any age group, and thus this product market will target both children, teenagers, family, and older people. Chocolate Solution’s product will involve uniquely designed products from the firm’s creative R & D and innovative team to meet its prospective market from its micro-clients pool. The company aims to meet demand as well as preferences for its high-quality premium consumer product. In this light, the firm’s objectives of developing quality and refined products will lead to its attainment of customer satisfaction and loyalty.

Chocolate Solution believes that its premium chocolate product will fetch high demand as they are the preferential chocolate products with increased demand from market trends and projections. Similarly, high-quality assorted chocolate products will meet the social class’s needs as it pertains to a variety of products.

7.2 Product Features

Chocolate Solutions products entail several products:

7.2.1 Assorted products, premium products, and healthy products

7.4 Quality level

The quality level of Chocolate Solution products will be developed by the firm’s innovative team that includes experts and experienced designers who aim to create top-notch quality products. The firm’s design team’s high-efficiency levels will increase the firm’s production capacity and respond to the client’s demands.

7.5 Branding

The firm’s product line solely function without relying on strategic partnerships with other established brands or collaborations with leading market players. In this perspective, the firm has confidence in the quality of its brand image and reputation. In line with the firm’s short term and long term values, the firm believes in developing quality flavor and ingredients in the production process. Chocolate Solutions believes that is production team can penetrate the US market without reliance on strategic partnerships based on its production team expertise. The firm’s choice of its name “Chocolate Solutions” is based on its belief that it can respond to the chocolate market needs and product demand. The firm’s trade maker will have an original sky blue and white Chocolate Solutions imprint on this color

7.6 Package

The firm will ensure that its product quality is matched with an attractive and appealing to prospective clients. The packaging should depict the social aspects of sharing new products with friends and a healthy lifestyle, representing the firm’s brand image and reputation. With various distinctions in its product line, the firm will have different packaging for different products.

Figure 1. Attractive/Appealing Chocolate Packaging

8 Place

8.1 Objectives

Chocolate Solutions was incorporated in Chicago in 2019 as a startup company that deals with chocolate products. Its products include chocolate products, chocolate toppings, assorted products, and ingredients. The firm’s primary goal is to develop its footprint and attract prospective clients, which will enable the firm to build its market niche.

8.2 Channel System

8.2.1 Direct Channel System

The firms will use the direct selling system in its online platform and its outlet within Chicago. The firm believes that this system will be important in maintaining and meeting its client base generated from its online platform. The firm will use its customer service platform to respond to clients’ needs majorly on its online platform. Likewise, massive investment in its production process, raw material supply and human capital mean the firm targets to build low-cost distribution channel through I-outsourcing products to be distributed indirectly through distribution channels and directly with their firms.

8.2.1 Indirect Channel System

The firms will use distribution channels as their main selling avenue to meet clients outside its central location in Chicago. The distribution channels will be among the best selling platforms since they are based in a strategic area with shopping centres. Through indirect selling, the firm believes that it will be able to maximize sales as the distribution channels from hypermarkets, supermarkets, retail stores, convenient stores will enable its products to penetrate the market at a fast pace to build its mar let presence, brand image and reputation.

8.3 Logistics and Customer Service

8.3.1 Facilities

The firm will only have five flagship stores in Chicago with its distribution channel used as the main selling platform. In this regard, the firm will rent a production centre as well as a warehouse. The production centre plus the warehouse will cost 5,000 square feet and will cost $50,000 a month.

Chocolate Solutions should take advantage of its outsourcing services which will be used in the distribution of the frozen products.’ With outsourced transportation services, distribution outlets will be used for indirect sales while managing its online and Chicago outlets. The firm will benefit product fast and reliable delivery of its products to different geographical markets. The firm will outsource distribution services for its products that are sold through an indirect selling system. This strategy will allow the firm to develop its production capacity and contractual agreements with different distribution outlets.

8.3.2 Customer Service

The firm will directly manage its customer service through the online platform while supervise its distribution channels to receive feedback and response from their prospective clients.

9 Promotion Strategies and Media Tools

9.1 Objectives

Chocolate Solutions aims to reach its target market and develop its promotional services through different platforms, reaching a high target market. The firm will expand its brand presence through advertisement.

9.2.1

9.2.2 Billboards

The firm can use billboards as part of its promotional tool. The billboard will involve creating and designing the firm’s products brand name, slogan, images, and trademark, which can be used in its advertising. The firm’s marketing team will ensure that the firm creates attractive promotional photos, which will be vital in steering the firm to reach the target market.

9.2.3 Magazines

Magazines are also vital as part of the firm’s promotional plan. Through magazines, the firm will also be able to reach its target market and attract prospective clients. The firm will take advantage of the print media to introduce the firm’s brand and our ideologies. The firm will use different magazines as a platform to reach diverse market niches to get the maximum number of prospective clients.

9.2.2 Social Media Platform

Instagram

Instagram is a social media platform which is typically known to attract the youth. Through the Instagram platform, the firm will mainly target online users who use the Instagram platform. With the ability to attract the youth and young people, Chocolate solution will boost its online and brand presence as it attracts the users of this social media platform. The firm will ensure that its online platform is creatively designed to attract young prospective clients through the quality image and presentation of its products and information.

Influencers

The firm will use an influencer or a known public figure as part of its promotional tool. With the respect and influence that prominent personalities and influencers generate, Chocolate solutions will benefit from this exposure and reach a massive audience of prospective and target clients.

You Tube

YouTube has been a promotional tool through social media, which allows a firm to interact directly with its target audience. YouTube allows users to view video content uploaded and provide feedback and comments in creating the video content viewed. Chocolate Solutions can use Youtube as a vital tool to spread information about its products. Similarly, through Youtube, a firm advertises its video content, which will appear as a pop-up advertisement and an influencer’s content with a massive following and subscribers. This strategy is also relevant when a firm does not want to develop its Youtube channel and thus rely on the Youtube platform of known public figures with massive following and subscription to spread information about its products. The use of Youtube as a promotional tool is as young people also use Instagram. Therefore this platform will be vital in attracting the youth and young people to be aware of the Chocolate Solution’s products.

9.4 Summary of marketing Plan Calendar

Chocolate solution will develop its marketing plan calendar, which outlines the framework that the form will use. Further, the marketing plan will provide a schedule that depicts how events will unfold in the firm’s marketing process from the first to the last. This process will guide priority on the primary duties and responsibilities of the marketing team at every phase in the marketing process. This plan also outlines the promotional tool that would be relevant at different periods to obtain maximum benefits, making the public aware of the firms and their products.

The advertising cost is estimated to cost 2,000,000 used over the different platforms that have been named above. The firm expects to reach maximum benefits from this product awareness strategy as this is the only method to improve the brand’s image, reputation, and market presence

10 Price

10.1 Price Objectives

The firm will have an average price set for its chocolate products, which are 2.75 /unit. However, this price will vary depending on luxury products, premium products, and assorted goods. With the inclining costs of raw materials, the firm promotional services will involve direct selling and direct sampling to obtain feedback from customers. Through direct selling and sampling strategy, the firm’s promotional tool customers will only sample a few products. Still, they will have to pay particular types of products depending on their interest and market demand.

10.2 Price Strategies

The firm will set its price for Chocolate products at an affordable rate as it starts in product launch to attract reach deep into the market. As cost is a factor that influences product demand. The firm aims to reap massive benefits from product awareness, which builds the firm image and brand. Thus, the firm will have an average price set for its products at $2.75, which will be used in the development of market sales projection.

11 Metrics

11.1 Metrics Objective

The listing metrics will provide key success factors relevant in enabling Chocolate Solution to attain or reach goals through its marketing plan. The listing metric provides the necessary points which justify the reason for developing the marketing plan. Through this process, Chocolate Solution can compare notes with competitors to assess how to improve and build its marketing process.

The listing also justifies the critical priority areas that require adequate attention. Therefore through the listing, the firms can develop a feasibility plan that depicts how the money will be spent and how expenditure.

11.2 Key Success Factor Matrix

The firm’s fundamental success factor matrix will involve the following analysis of material usage, brand popularity, advertisement.

11.3 Profit and Loss Statement

11.4 Break-Even Analysis

Chocolate Solutions break-even analysis will be generated from the firms, both fixed and variable costs. The fixed cost will entail its production cost, advertisement, rent, salary, insurance, and miscellaneous expenses. On the other side, the firm’s variable cost will entail expenses involved in purchasing raw materials, packaging, and delivery( Outsourced). From the firm’s break-even analysis, the total variable cost per unit 5,500,000, while the total fixed cost will be 4,800,000. With Chocolate Solution’s market forecast, the firm estimates that it will sell approximately 800,000 units, which are n inclusive of both premium products and luxury products. The firm’s sales will vary, ranging from the firm’s product line.

From the break-even analysis, the firm is expected to grow due to its high response rate to meet the market’s current market trends of a healthy lifestyle, critical to the firm’s growth. The firm expects to complete both prospective clients with US and emerging markets. The firm’s break-even units will be 711,016 units from the estimated forecast, which will result from breaking even sales of 26,545,000. The firms can break-even analysis depicts that the firm can take advantage of the emerging trends in the industry to penetrate the nationwide market and up to the international markets,

Conclusion

Chocolate company has a wide variety of chocolate syrup, white chocolate, and dark chocolate. There are various brands and flavors applied to the production of chocolate. Therefore the industry has a high buying power. Some of the companies that dominate the field are such as the Hershey’s and Nestle company. The dominant companies which pose a threat to the upcoming companies such as Chocolate solutions. The company has a healthy supply power as the raw materials are continuously supplied. However, there is a challenge in the supply chain as the suppliers face a challenge in the production of the raw materials. The industry is also full of stiff competition from large companies such as Mar’s Wrigley and Nestle. They have a large share of the market, which makes them stand out and have enormous brand loyalty compared to other companies. Their marketing strategies have made it easy to survive and cut through the market as they reach more people. The firm will develop a good pricing strategy, social media marketing, and broadcast marketing. Some of the critical success factors in the industry are such as high supply chain power. The supply chain power is boosted by the cooperation between the manufacturers and the farmers. Customizing and taking advantage of the events also boosts performance in the industry. Challenges are facing this field, such as the changing trends in health and diet. Consumers are more concerned with healthy eating, which has reduced the rate of sales for chocolate products. Besides, the supply chain also has a challenge as the farming process is wavering. Lastly, despite the weaknesses and threats, the company can break even by applying the business to business strategies as they boost sales. There are also opportunities as the company can expand its brand awareness using social media, which gives exposure.

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