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Executive Summary
This report on Haighs Chocolates- An Analysis on its Marketing Practices opens up with an
overall introduction on why this study has been conducted, including the purpose,
methodology, scope and limitation associated with it. The second topic is the background,
which briefly talks about the chocolate confectionary industry on a global scale with an
three breaks down the marketing mix of Haighs on Product- the range of varieties offered to
the customers; Price- the pricing strategy implemented based on production; Place- how
Haighs believes in operating directly through their own retail outlets and Promotion- the
strategies to build customer equity together with supporting statements by other notable
authors. Topic four focuses on the competitor analysis in terms of marketing mix by a direct
player such as Kennedy & Wilson and an indirect player such as Lindt Cafes and Shops and
compares the contrasting differences as well as the parallels in the implemented marketing
strategies, with the additional reasons behind conducting such a study helping any firm to
stay one step ahead. Topic five recommends some strategies whereby Haighs can turn its
weaknesses such as premium pricing into strengths and utilize the external possibilities such
as expanding overseas to its benefit, relating to the SWOT analysis and Positioning Chart in
the Appendix, and keeping the marketing mix as the base. And finally topic six concludes
how Haighs needs to tackle some of future challenges with innovative measures in order to
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Table of Contents
1.0 Introduction..........................................................................................................................4
1.1 Origin of the report.......................................................................................................4
1.2 Objective of the report..................................................................................................4
1.3 Methodology.................................................................................................................4
1.4 Scope.............................................................................................................................4
1.5 Limitation......................................................................................................................5
2.0 Background..........................................................................................................................5
3.0 Marketing Mix: Haighs Chocolates....................................................................................6
4.0 Competitor Analysis.............................................................................................................9
4.1 Kennedy & Wilson........................................................................................................9
4.2 Lindt Cafes and Shops................................................................................................10
5.0 Recommendations..............................................................................................................11
6.0 Conclusion..........................................................................................................................13
7.0 References..........................................................................................................................14
8.0 Appendix............................................................................................................................17
8.1 SWOT Analysis............................................................................................................17
8.2 Positioning Chart........................................................................................................20
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1.0 Introduction
This report has been conducted partly for analysing and relating marketing theories such as
the marketing mix, etc. with real life practices at Haighs Chocolates as well as for the
Each student has been assigned to submit a report by comparing their findings with the
marketing theories and observe how they can relate to sustainable practices.
services
3. To provide consistent descriptions of results while relating them with marketing
theories
4. To recognize the sustainable practices undertaken by the business
1.3 Methodology
Related data for developing this study has been acquired through secondary sources such as
1.4 Scope
This study gives a preview of the approaches employed by a well-known family business and
conveys views and recommendations to be taken into account for future references.
1.5 Limitation
The only limitation faced while preparing this report was the time constraint due to increasing
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2.0 Background
Despite the fact that the Global Candy and Chocolate Manufacturing industry has shown
sluggish behaviour in the recent years due to the growing number of health conscious
consumers, developed markets in Europe and North America remain the prominent producers
in the world with more emerging markets in Brazil and Latin America becoming significant
chocolates, candy, etc. has shown similar movement. However, some successes have been
noted in terms of premium, artisanal and niche products and they are expected to perform
better as the market for bagged selflines/softline products is highly saturated and owing to the
The top five manufacturers in the world chocolate confectionery industry in terms of
company shares constitute of Mars Inc. (14.5%), Mondelez International Inc. (14.3%), Nestle
SA (12.3%), Ferrero Group (9.1%) and Hershey Co. (7.3%) according to the statistics on
of the following companies in the top Mondelez International Inc. (39%), Mars Inc. (15%),
Nestle SA (12%), Chocoladefabriken Lindt & Sprungli AG (9.3%) and Ferrero Group (4.6%),
with Haigh Pty Ltd, A E not far behind in no. 8 with 0.9% in 2015. In terms of brand shares,
Haighs Chocolate comes in no. 19 with 0.9% and Cadbury at the top of the list with 30.5%.
The oldest family owned chocolate business in Australia, Haighs Chocolates, is situated
across 14 retail outlets in Adelaide, Melbourne and Sydney with its manufacturing unit in
Adelaide. The unique appeal of Haighs is producing exclusive blends and flavour, combined
with handmade creations from sourcing the best cocoa beans around the globe. They believe
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Haighs sources most of the beans from UTZ certified farms across the world and works to
ensure improved lifestyles to the cocoa farmers and families through sustainable farming
methods and cultivating better conditions for crop growth, therefore increasing their earnings
and contributing to financial sustainability while protecting the environment and natural
resources. Haighs also reuses rainwater from its factory roof, thereby decreasing the amount
of water needed for production. It is a signatory of the Australian Packaging Covenant and
provides 100% recyclable and biodegradable packaging. It offers the option of returning all
its recyclable products back to it apart from recycling all its bottles, cans, newspapers, etc.
itself. There is no use of plastic even in its outlets and the gift packaging are reusable items.
Haighs Chocolates specializes in handmade premium quality chocolates combined with the
deliverance of a world class chocolate experience. They dont just offer products; they tap
Tolonen et al. states that a diverse product portfolio will have a positive effect on a
companys sales volumes, and the product variety is often justified by fulfilling customers
requirements (2015, p. 468). Haighs has a huge line of products ranging from bars, blocks,
confectionery, novelties, gift cards, boxed and loose chocolates with variations in each. They
have also introduced gluten and egg free chocolates for those who need to follow such
lifestyles. Additionally, they also have special products, hampers and corporate branding to
accommodate the needs of many. In terms of levels of product, their core customer value is
consumption; the actual product range from the brand name of the 100-year-old family
business to features such as hand-made and hand-wrapped fresh batch of chocolates of more
than 250 in collection; and the augmented product is the personalized customer care they
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provide with online purchasing and delivery options combined with return policies only add
to their sophistication. Creating a good customer experience through online purchase and
delivery is an integral part of marketing. According to Rose, Hair and Clark (2011, p. 27),
customer experience is defined as the impression that people take-away after interacting
with a businesss products and services and upon this encounter, this perception gets
embedded in the minds of the customers, which could either make or break a business.
Haighs follows the strategy of specialty products due to being high-end goods.
They import high quality beans from South America, Africa and the Pacific and ingredients
such as sugar, milk powder, dried nuts and fruit from Australian producers. The rest of the
procedure of roasting and blending is done locally in their factory in Adelaide. O Brien
(2014, p. 30) argues that improved effectiveness through suppliers may not reduce costs but
with the right kind of suppliers, a significant value can be added that will in turn help to
create and promote brand equity, thus, leading to better perceived brand offerings in the eyes
Zucchella and Palamara (2006) say that niche strategies are considered to be competitive
strategies with a unique blend of resources, competencies and capabilities that create a
competitive edge that a business needs to flourish. Haighs is doing just that, targeting a niche
market, especially the tourists and high-end customers during special occasions such as
In terms of pricing, they follow a cost-plus pricing under cost-based pricing strategy due to
being a premium quality brand offering fine products. Their products range from $2.60 for a
medium gold/bronze foiled dark or milk chocolate heart to $177 for dark connoisseurs
selection. Cost-based pricing is when the price of a product is set by multiplying the cost of
the product by some number greater than one. For example, if the markup on a particular
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product is 15%, the price of the product would be 1.15 times the cost of producing the
products that require a lot of effort leads to tarnishing the brand image. As stated by Caro and
acknowledge that product decisions reside at the interface of both functional areas, and
through product choice, operations can indirectly affect the pricing strategy.
Haighs communicates with customers regarding new products, special offers on occasions,
competitions and other information through the news content on their website. They also
keep their customers updated via social networking websites by constantly engaging them in
their posts with sincerity. Kim and Ko (2012) came to a conclusion in their article that social
media marketing activities lead to value equity, brand equity and relationship equity and these
in turn create purchase intention which results in customer equity. Haighs also promotes
videos of chocolate making, the experience of retail, etc. on their very own Youtube channel.
Paek et al. (2014, p. 548) explains that Youtube is rated as the most visited video-sharing
site and the second most popular website and social media platform and has become a
source for conveying messages and promotions by brands among their customer base. Apart
from these, Haighs also takes chocolate enthusiasts on tours in their factory to give them a
Haighs source their ingredients from around the world and carry out rest of the procedure in
their factory in Adelaide, after which, the final products are sent to their own retail outlets in
Adelaide, Sydney and Melbourne. They dont believe in operating with intermediaries;
instead they want to reach out to the customers and create a meaningful experience for them
by selling their products directly. There is also the option of purchasing products online
whereby they deliver the goods to a designated address within Australia. Li, Xu and Li (2013)
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argue that quality is correlated with return, and even though with high quality products, price
needs to be adjusted accordingly, the number of returns get reduced and hence the cost during
In any kind of industry, there are multiple players competing to gain a higher market share, to
make more sales, to create customer loyalty, to become sustainable. These players are broken
down further into categories of direct or indirect competition for an individual organization or
business. Direct competitors are the ones who offer the same basic products or services and
indirect competitors are those who offer substitute products or services that could be used
instead. Upson et al. (2012) mentions that Competitor analysis can usually reveal what move
a rival is likely to make, allowing a firm to prepare for the move, particularly focusing on
For Haighs Chocolates, 2 competitors have been taken into analysis. Direct competitors
include businesses like Kennedy & Wilson and indirect competitor, Lindt Cafes and Shops.
Product- The product mix of Kennedy & Wilson include boxed chocolates, chocolate bars,
filled chocolates, single chocolates, specialty products, chocolates for cooking and Easter.
There are sub categories under these, for instance, their 100g chocolate bars come in either
milk, dark, orange and mint. They also offer customized corporate gifts and accommodate for
celebratory occasions in the form of cakes, desserts, etc. In terms of levels of product, the
core customer value is consumption; the actual product includes the highest quality of cocoa
around the world sourced to produce premium quality chocolates that are rich in cocoa and
low in sugar content; and the augmented part of the product is, products are shipped
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domestically for those who purchase online. The chocolates sold by KW are classified as
convenience products.
Price- They follow a good value pricing under the customer value-based pricing by
maintaining a balance between quality products and services with fair pricing. Their products
Place- Kennedy & Wilson source high quality cocoa from South America, Asia, Caribbean
and Africa, early vanilla was imported from Madagascar and Fiji but now from Queensland
with berries and other raw ingredients for fillings from Yarra Valley. They aim to make their
chocolates easy to find and have many stockists in the form of stores, cafes, supermarkets,
etc. Their marketing channel involves one intermediary - retailers - following an intensive
footprint as possible and follow ethical means by sourcing beans from slave and child-free
labour.
Promotion- KW maintains public relations in the form of social networking and made a
column in the Life section of The Australian in 2013 under Chocolates blended in heaven
Product- The product mix of this indirect competitor is vast, ranging from chocolates to cakes
and coffees, ice creams, hot chocolates, gift boxes, etc. The core customer value is
consumption; the actual product includes the high quality branded chocolates and products;
and the augmented product include the experience of the ambience and other services of the
caf. They take cake and bulk orders as well and their caf products are classified as shopping
products.
Price- Their products are slightly high priced, making them cost based pricing.
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Place- Most of their cocoa is procured from Ghana and their cafes are spread-out within and
outside Australia. They take part in sustainability in many ways through improving lives of
the farmers and others, setting up schools and clean drinking water, etc.
Promotion- Lindt offers promotion in their cafes with their monthly hamper giveaways and
other good deals and participates in several commercials to entice the customers. In terms of
PR, they maintain customer service, operate on social media and send out newsletters.
5.0 Recommendations
Referring to the SWOT analysis in the Appendix, there are some weaknesses that could be
worked upon to turn them into strengths and in terms of opportunities, Haighs could further
Since hand-made chocolates take a lot of hard work and effort, charging a high price is
justifiable, however, Haighs should also bring in a different line of products for a different
target market at an affordable price such as, the lower middle class since they constitute a
larger part of the population. This will help them to bring in consistent sales throughout the
year rather than on celebrated occasions or holiday seasons, leading towards a sustainable
business. To support the previous statement, Draganska and Jain (2006, p. 164) quotes, A
common strategy for firms extending their product lines is to differentiate their offerings
vertically, i.e., to provide different quality levels at different prices to capture the differential
Haighs should start to gradually expand outside Australia by taking the first step in
delivering its products to customers in other parts of the world. Setting up their own
distribution centers in populated and core markets will ensure products reach the destinations
without delays and complications. Skrinjar, Drljaca and Kavran (2013) mention that one of
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the best solutions for setting up infrastructural facilities for overseas delivery would be the
airports.
Wharton (2014) emphasizes on the importance of advertising and promotion taking value-
adding forms and serving a diverse range of interests across businesses, organizations, groups
and individuals. Haighs is already a brand in the Australian market and people know about
entice the customers further. These adverts need to be differentiated from the mass products.
Similar to the videos on their YouTube channel, they could promote their chocolate making
and put emphasis on their employees for highlights. Furthermore, they could put these
advertisements specifically in hotels since one of their target markets involve tourists.
A loyalty program could be set up at Haighs to reward their frequent customers, by offering
them some discounts on selected items or giving them a gift voucher if they cross a certain
threshold in terms of price. This factor delights the customers, and help to retain them which
adds to Haighs consumer equity. Kim (2015, p. 250) notes customer equity to be a proxy
for the value of the firm and that purchase intention leads to that and hence a sustainable
business.
Since Haighs Chocolates targets the tourists, they should consider the idea of setting up their
retails stores in some of the most crowded airports around the world for global expansion.
Swarbrooke and Horner (2012) support the concept of how airports can bring in extra
business and revenue through retail sales and food and drink sales. In this way, Haighs could
brand themselves in different parts of the world and create demand that will make way for
setting up manufacturing units or retail outlets in those countries further into the future.
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6.0 Conclusion
Due to growing health concerns around the world, including Australia, sales in the chocolate
industry are predicted to go down in the coming years. Moreover, there is likely to be a
shortage in cocoa as well. With keeping these challenges in mind, Haighs Chocolates need to
make profound innovations without compromising their fineness and keep going towards the
future with greater success than they have had in the last 100 years.
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7.0 References
Caro, F, & Martnez-de-Albniz, V 2012, Product and Price Competition with Satiation
DCosta, V 2016, Global Candy & Chocolate Manufacturing, IBISWorld, viewed 26 May
Draganska, M, & Jain, D 2006, Consumer Preferences and Product-Line Pricing Strategies:
<http://www.haighschocolates.com.au/>.
Kim, A, & Ko, E 2012, Do social media marketing activities enhance customer equity? An
empirical study of luxury fashion brand, Journal of Business Research, vol. 65, no. 10, p.
1480-1486.
Li, Y, Xu, L & Li, D 2013, Examining relationships between the return policy, product
quality, and pricing strategy in online direct selling, International Journal of Production
OBrien, J 2014, Supplier Relationship Management: Unlocking the Hidden Value in Your
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Paek, HJ, Kim, S, Hove, T & Yoon, J 2014, Reduced Harm or Another Gateway to Smoking
Passport 2016, Chocolate Confectionery in Australia, Passport, viewed 26 May 2016, <
http://www.portal.euromonitor.com.ez.library.latrobe.edu.au/portal/analysis/related>.
Pavia, TM 1995, 'Profit Maximizing Cost Allocation for Firms Using Cost-Based
Rose, S, Hair, N, & Clark, M 2011, Online Customer Experience: A Review of the Business-
Skrinjar, JP, Drljaca, M, & Kavran, Z 2013, Logistics of International Express Shipping and
Swarbrooke, J & Horner, S 2012, Business Travel and Tourism, Routledge, Abingdon.
management Targets and key performance indicators for product portfolio renewal over life
cycle, International Journal of Production Economics, vol. 170, part B, pp. 468-477.
Upson, JW, Jr, DJK, Connelly, BL, & Ranft, AL (2012), Competitor Analysis and Foothold
World Cocoa Foundation 2016, Our Approach, World Cocoa Foundation, viewed 26 May
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Zucchella, A & Palamara, G 2006, Niche Strategy and Export Performance, in (ed.),
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8.0 Appendix
Strengths
to add value to the end product for the customers, differentiating them among the
from, giving customers the luxury to mix and match different kinds of samples to
making, hence providing tours around the factory in Adelaide and giving free samples
afterwards makes it more attractive for the customers, as they get inclined to buy
further.
Promotions on celebrated days Haighs Chocolates communicates diligently about
all its special promotions on Mothers Day, Easter, Christmas, etc. to the customers,
previously in this report, which brands them in the community for taking
and even on a global platform after achieving the international proclamation, which
customers and fans on its social media pages, letting them know about the recent
updates and news, thereby making them feel engaged and involved with the Haighs
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Operating without intermediaries Haighs Chocolates believes in selling directly to
their customers through their retail stores and online since this approach adds a certain
meaning to them as well as the customers besides retaining margins at each level of
the production.
Weaknesses
Premium price Haighs charges high prices on its products, since its target markets
are tourists and upper middle class. However, this becomes a weakness since these
markets do not have a lot of opportunities for penetration and customers are not able
online purchase and delivery to its customers residing in Australia only. However, if a
customer wants to send a box of Haighs Chocolates to a loved one in another country
Opportunities
Loyalty programs The trend nowadays with most retail stores is to give back to their
loyal customers through loyalty programs. Haighs could follow a similar path and
could set up stores at airports in other parts of the world, after doing a market analysis
in that region.
Threats
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Other popular brands in the market There are several other well-known brands such
as Cadbury, Lindt, Ferrero, etc. operating side by side in the market under a lower
are on the rise, making the chocolate production turn expensive day by day.
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For the positioning chart, 4 competitors of Haighs Chocolates have been considered for the
analysis- Cadbury, Lindt, Zokoko, Bahen & Co., and Kennedy & Wilson.
The two attributes have been taken into account- Variety because it is an important aspect
when it comes to purchase as customers preference vary and they are constantly looking for
newer flavours, textures, etc. to add to their list; and Price because most customers opt for
products that they are able to afford without much consideration and thought, making it a one
High Price
Haighs
Chocolates
Zokok
o
Lindt Caf and
Bahen
Shops
& Co.
Kennedy &
Wilson
Cadbur
y
Low Price
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