Business Environment Analysis For Marks And Spencer Economics Essay

Business Environment Analysis For Marks And Spencer Economics Essay My chosen organisation is Marks and Spencer. Marks and Spencer has six main objectives. The main goal of any business is to increase profit. This is done by working out the total revenue that the business has made from selling and costs of its product. For any business to survive, profit must be earned. Like any other business Marks and Spencer needs to increase its sales. To do this they must fulfill what the customer needs and desires. To increase their sales Marks and Spencer needs to attract new customers by for instance aiming for the younger market whilst at the same time ensure that its loyal customers are kept satisfied with a supply of products which cater for their needs. Marks and Spencer also have the objective of earning market leadership. In order to do this, they must become more competitive. By meeting the wants and needs of more customers as well as by attracting more potential customers and offering better quality for affordable prices, Marks and Spencer can oust the competition and achieve a high standing status in the market. Offering a high quality service is also one of Marks and Spencers objectives. In their annual report they claimed that no one cares more about quality than they do and in fact Marks and Spencer are well known for this. Like other businesses another objective for Marks and Spencer is growth. For Marks and Spencer to survive and to be competitive, the issue of growth must be attended to. By growing, the business is expanding globally and thus achieves recognition in different countries attracting different pools of clientele. The last objective of Marks and Spencer is rewarding shareholders. It is important for a business to keep the shareholders content since they are a fundamental source of investment. Marks and Spencer needs to make profit in order to maintain share holders as well as attract further investment. Each of these objectives has its own importance, neglecting either one of them would surely bring the organisation to a halt. Marks and Spencer has created a set of six priorities in order to better meet the objectives it has set out. The organization aims to retain their leading position in the market whilst improving their performance in certain sectors which do not make as much profit as other areas, such as for instance the food sector. In this way they can continue to satisfy the current customers they hold whilst attracting potential customers by focusing on better promoting one of the branches of their business. Through the optimization of margins, controlling costs and expenditure and maintaining a strong balance sheet, Marks and Spencer can ensure a better calculation of its profits and losses and thus have a better chance of securing its place in the market through the composition of a well-planned market strategy. Finally and by no means as a last priority, Marks and Spenc er deems it necessary to enforce high ethical standards. Essentially the organization has to increase its sales since this is the only way in which it will be able to make a profit. It therefore has to invest in its products and ensure that these are marketed well as its ultimate goal is to attract customers and keep them from going to their competitor. It is of no surprise that driving their international business is not a first priority since ultimately I think they would be better off ensuring that the organization is functioning with utmost profitability before seeking to expand to other areas. 1b) External stakeholders play an important part in the achievement of the business, this is because they sell to and purchase from the company, but they are not employed by the company. They are considered stakeholders as they stand to gain from the company. Some external stakeholders of Marks and Spencer are customers, suppliers and the general public. One of the most essential stakeholders of a business is the customer. The customers of Marks and Spencer purchase the products marketed by the company resulting in a profit for the organization. Without customers the business would not survive. Suppliers are external stakeholders as they sell their products to Marks and Spencer in exchange for a price; thus both parties benefit from this relationship. Marks and Spencer need to take care of their suppliers to ensure that the suppliers continue to provide them with good quality products for a reasonable price, so that in turn Marks and Spencer provides its customers with the same good quality products at competitive prices. Another important stakeholder is the general public. The organization must take into consideration various factors when developing products as well as their production processes. The reason for this is the impact and influence which such process or product may have on potential and actual customers. Marks and Spencer have to ensure that their goods are environmentally friendly and are produced in an environmentally friendly way. Having a means of production which creates high health or environment hazards will result in a decline of people purchasing the product, or potentially purchasing from that organization, therefore, a lower amount of sales and consequently a reduction in profits. 2) There are several conditions that affect demand in an organization. A change in a customers income is one such condition. If the purchaser does not have a good income to maintain himself or his family, then he will definitely not have enough money to treat himself to something that he wants, conversely, if the buyer earns a good income, he would be more likely to spend. Thus the rise in income is directly proportionate to the demand and affects it in such a way that with an increase in income, the consumer will tend to purchase more products than he would if he earned a lesser amount. Marks and Spencers offers high quality products with good value, thus people earning an average wage would definitely afford their products. A second condition is when a substitute product changes its price. The increase in the price of one good will direct to an increase in demand for the competing product. Another condition is when a price of a complementary product changes. Here one considers supplies that are in complementary demand, such as the demand for video players and video films. If Marks and Spencer sells DVD players at a cheaper price, the likelihood is that more DVD players will be bought. This will lead to a growth in market demand for DVD films. The changes in weather also condition demand. The price of a product fluctuates when either demand or supply changes. For example in good weather the supply of grains and oil normally increases. Customers will tend to purchase more when products are more readily available and are at a lower price. One can also consider the scenario where the change in climate or weather increases the demand as is the case in the sale of umbrellas when rain is expected. Another condition is the changes in taxation on the product. The implementation of a tax by the government affects product prices in such a way that the organization will have to raise its price in order to be able to meet the tax requirement, cater for the expenditure incurred for the purchase of the product as well as keep a percentage of profit from the sale. Thus one must assess whether the business can pass some or all of the tax onto the customer through a higher price without negatively affecting the demand. Clothes and accessories are essential products in todays world and affect all levels of society indiscriminately. A condition that relates to their demand is changes to tastes and fashions. Companies try to influence the varying tastes and preferences of households in favor of their products with the help of a good marketing and advertising strategy. The influence which these advertisements have on the public brings about an increase in demand for their products. Marks and Spencer offers a wide range of variety in clothes. They offer a selection of inexpensive to extravagant and luxurious products that cater for every pocket. Another condition is a change in the population, such as growth. Due to the inelasticity of demand of a product such as food; which will continue to sell despite any increase in price; as the population grows so does the demand. Consequently this leads to growth in agriculture and the expansion of cultivated land. I think in this type of situation the only thing that Marks and Spencer can do is generate more products so as to cater for a bigger demand by the growing population. Marketing in itself is a condition which affects demand. Marketers must pursue constant research and should not rely solely on their own judgment to determine whether marketing decisions need to be adjusted. When considering price adjustment, the marketer must investigate the effects which a change in price is likely to have on target market demand for a product. Understanding how changes in price affect the market requires the marketer have a firm understanding of the concept of elasticity of demand. This entails an evaluation of the price and how it alone affects the overall demand. This assessment necessarily requires one to consider the manner in which competitors may react to the marketers price change by changing the price of their product. Thus one here anticipates the market reaction and how this will affect company revenue. Marks and Spencer continue to strive to meet customer demand; the expansion of their websites offering free delivery and online deals clearly illustrates this. Marks and Spencer have continued to endeavor to provide a better service by increasing the number of people in their trading teams in order to focus on bringing the right products to the right stores, to meet the ever-growing demands of the customer. 3a) A mixed economy is when both the private and the public sector take part in the production, distribution and all other economic activities within a state. The mixed economy permits the inclusion of private contribution in the field of production in a situation of competition with an aim of achieving profit. This mixture of free enterprise and government control has been looked upon from varying perceptions; some claim it is beneficial whilst others believe it has no impact or is detrimental to the economy of that state. An advantage of a mixed economy is that it assists in increasing over-all production in the nation.  Private and public segments work hard in order to bring about more production. People can take the initiative to start companies on their own, whilst deciding what to produce and the prices they will charge for the goods or services that they offer.  Ã‚  Another advantage is the use of government revenue through the payment of taxes, these organisations obtain benefits such as those provided by government services like social programs, subsidies and other government incentive programs. The benefits of mixed economies have been witnessed by the growth of some states into some of the leading markets in the world such as those of the United States, the United Kingdom and Canada. Some disadvantages of a mixed economy are that businesses have to find their own niche in the marketplace for products, and that they have no control over the taxes they pay.  Companies often complain of tax rates being too high for the services and products they offer. Certain economists opine that in fact, mixed economies hardly ever accomplish the growth at which they are aimed. They also criticize the fact that the mixed economies do not make proper use of national resources. 3b) The current economic climate of the USA is a recession, as seen in the figure below. A recession is a phase of general economic turn down. This comes with a fall in the stock market, an increase in unemployment and a turn down in the property market. If a recession persists long enough it is often then classified as a depression. The last two depressions of the USA occurred in 1990-1991 and 2001, lasting eight months each and only two of the ten previous post-depression downturns lasted as long as a full year according to the National Bureau of Economic Research. Tony Fratto, the Deputy Press Secretary for the White House emphasized on the need for the American Government to take the necessary steps to bring the economy back to its full force. He propounded on the importance of returning the financial and credit markets back to their normal state, and to try to re-establish the housing market. Mr. Fratto also held that in order to reach stability the states must necessarily take cognizance of the current unemployment situation. Although there is no singular cause, one of the principal reasons given to explain the current economic recession was the housing downturn that resulted in losses of multibillion dollars for one of the nations leading banks as early as 2006. Furthermore, June 2007 was recorded as a period with the lowest rate of home sales and in December of the same year, the recession was deemed to have started. In 2008 due to a reduction in the labour market, the costs of living rose along with the unemployment rate, leading to a reduction in the peoples savings. In 2009/2010 the global markets continued to shift, unemployment increased whilst profits, interest rates, expenditure and investment continued to descend rapidly. Various commentators have stated that the present recession is one of the extended downturns since the Great Depression of the 1930s. What is President Obama doing to try to get out of the recession? President Obama requested Congress to provide him with an economic package the value of which amounted to more than 800 Billion Dollars in order to be able to cope with the current economic crisis. As part of his economic policy the President engaged in a series of talks with the banking sector to introduce new banking policies for the benefit of its customers. Monetary and fiscal policies are being updated, special care being taken so as to reduce the present economic crisis. Many US economic policies are being promulgated by government to stabilize the financial sector. A motion was put forward for the modification of health insurance in order to ensure better health for residents and counteract the repercussions that poverty might bring upon the American citizens. The introduction of new inventions and ideas would help in the economic development of the continent and generate a new source of investment and income. Currently, one can see an immense expansion being demonstrated in the area of computing, aerospace, medical and military equipment. 4a) Price intervention in the context of the European Community refers to a point when the world market price falls below the EU price, the EU interferes to buy the surplus product, in order to keep the price high. Fifty years ago, the importance of the EU agricultural policy was to supply enough food to a Europe coming from a time of shortages, due to war. The EU policy seeks to facilitate the route for producers of all forms of food; such as crops, fruit and vegetables; in order to enable them to compete with other producers on both a European and a global scale. The EU nowadays helps farmers by giving them payments to keep their lands in good condition and to meet the environmental and animal welfare standards, as an alternative to paying famers to produce more. The Common Agricultural Policy with the help of the Community, purchases farm products after the market price falls below the agreed level so as keep itself from the accumulation of Butter Mountains and Wine Lakes. The advantages of price intervention in the EU through the Common Agricultural Policy are that it provides incentives and measures to raise productivity and ensure reasonable living standards for the agricultural society. It also promotes the stabilization of the market whilst ensuring availability of food products at reasonable and realistic prices. The disadvantages are that due to an increase in productivity leading to a surplus which can result in Butter Mountains. These cause an increase in the tax load on EU Member States due to a rise in the contributions each must make to the budget. I think that the European Unions Agricultural policy is a necessary tool which allows farmers to maintain their jobs whilst keeping agricultural produce at a stable price for everyone to afford and thus minimalising waste and expenditure. http://europa.eu/pol/agr/index_en.htm http://news.bbc.co.uk/2/hi/4407792.stm 4b) Introduced in 1999, the European Economic and Monetary policy aimed to facilitate the free movement of goods, services, capital and labour. Full integration necessitates the harmonization of member states in certain sectors in order to achieve greater unity and symmetry. EMU in conjunction with other policies implemented by the European Community seeks to achieve this objective. Having the euro as a common currency has proved particularly useful during the recession because it provided more stability for countries within the Union by allowing them to deal with the economic crises in a strategic and co-ordinated manner. The benefits of being in the Euro-Zone are that goods, services and profits are easily moved across the national borders of the Unions member states. The Euro has gained strength over the years and now competes with strong-standing currencies such as the American Dollar. An additional benefit of the adoption of the EMU is that it is now becoming far easier to trade, travel and invest within the Union itself. However, in order to join the EMU, EU member states need to meet certain criteria. Every governments debt must be not exceed 60% of a countrys gross domestic product, the deficit must not be greater than 3% of the nations gross domestic product and the inflation rate must be reduced to below 3.2% and conversely government bonds producing 7.7%. Member States encounter certain additional problems when considering full integration with the European Union; these include dealing with tax, the application and transposition of different regulations affecting financial intermediaries along with security trading systems. In conclusion I would like to speak from my own personal experience as the citizen of one of the smallest member states in the Union. Malta adopted the Euro in 2008; the process of adjusting our economic and financial institutions to meet the established criteria was no easy one. The strive towards full integration is no easy task but so far has reaped many benefits, the only hope for the future is that it will continue to do so. http://lexicon.ft.com/term.asp?t=Economic-and-Monetary-UnionEMU http://ec.europa.eu/economy_finance/publications/publication_summary12325_en.htm http://www.questia.com/googleScholar.qst;jsessionid=LZQpGtQWjRL2yvLcRhXHT5tv3vQhW31Mcq3jhc1qYn14HWcGPT4g!631636653!610724718?docId=5001841397 Bibliography 123helpme, (2010) Marks and Spencer objectives, [Online] Available: http://www.123helpme.com/view.asp?id=149330 [Accessed 2/1/10] Blurit, (2010) Mixed Economy [Online] Available: http://www.blurtit.com/q917361.html [Accessed 20/1/10] Economy Watch, (2010) Mixed economy, [Online] Available: http://www.economywatch.com/world_economy/world-economic-indicators/mixed-economy.html [Accessed 20/1/10] HNC/D Module 1 Course Notes, RDI, 2005. MS Full Annual report and financial statements 2009 Directors report [Accessed 2/1/10] Net MBA Business Knowledge Centre, (2010) Price elasticity of demand, [Online] Available: http://www.netmba.com/econ/micro/demand/elasticity/price/ [Accessed 10/1/10] Trading Charts, (2010) How Supply and Demand Determine Commodities Market Prices, [Online] Available: http://futures.tradingcharts.com/learning/supply_and_demand.html [Accessed 15/1/10] Kevin Colby, News. Politics. Liberty, (2010) Americas Current Economic Condition, [Online] Available: http://kevincolby.com/2008/10/26/americas-current-economic-condition/ [Accessed 21/1/10] Chris Isidore, CNNMoney.com senior writer, (2010) http://money.cnn.com/2008/12/01/news/economy/recession/index.htm http://www.economywatch.com/economic-policy/us.html http://www.economywatch.com/finance/public-finance/public-finance-and-public-policy.html http://www.unb.ca/news/view.cgi?id=1715 http://www.investorwords.com/4086/recession.html

Malaysian Legal History Essay

The Straits Settlements were a group of British territories located in Southeast Asia. Originally established in 1826 as part of the territories controlled by the British East India Company, the Straits Settlements came under direct British control as a crown colony on 1 April 1867. The colony was dissolved in 1946 as part of the British reorganisation of its south-east Asian dependencies following the end of the Second World War. The Straits Settlements consisted of the four individual settlements of Malacca,Penang (also known as Prince of Wales Island), Singapore (with Christmas Island and the Cocos Islands). The island of Labuan, off the coast of Borneo, was also incorporated into the colony with effect from 1 January 1907, becoming a separate settlement within it in 1912. With the exception of Singapore, Christmas Island, and the Cocos Islands, these territories now form part of Malaysia. The Island of Penang in highligh was under the governance of Sultan of kedah however its noted that after the esthablishment of English East India company an agreement was penned by the Ruler of Kedah and the company for penang. Now in judging what is the â€Å"’lex loci† of the island will require answers to two questions as below: i) Was the Island a â€Å"settled† or â€Å"ceded† colony?. ii)Was the law of Kedah to be applied to island of Penang on ground that the island was â€Å"ceded†? For the first 20 years after esthablishment , it was noted that the only law in place was â€Å"Regulations of 1794† or â€Å"nature of law†. On March 1807, the English Crown granted the first charter of justice, which resulted in the esthablishment of Court of Judicature in Penang. The effect of this charter could be seen in Kamoo v Basset, In re Goods of Abdullah and Reg v Willans. The Kamoo v basset (1808) case, notes that the plaintiff a native of Bengal, had agreed to be an employed by the defendent who was an army officer in the Bengal Native Infantary. However upon severe mistreatment by the employer an Police Majistrate complaint was made by the plaintiff. The plaintiff filed and action for assault,battery and false imprisonment against the defendent,claiming damages for $600. The verdict in short noted payment to plaintiff in $150 with cost. In the Goods of Abdullah (1835) is noted the principle issue is whether a Muslim,who died in Penang,device his entire property by means of will? However it was decided that the will of Abdullah being esthablished as a valid instrument. In the case of Fatimah Ors v Logan Ors it was noted that since 1786 , Penang being then a desert and uncultivated island,inhabited except by few intinerant fisherman and without any fixed institution was ceded by the Rajah of Kedah to Captain light,an office of EIC,for and on behalf of the company. This fact was important in this case in view of the platiff’s petition to obtain a decree of the court declaring that the deceased died intestate. Three preliminary question arised in this case which were, i) Wheter the capacity of the deceased to make a will is to be decided by Mohamedan or by English law. The verdict was given as the deceased’s capacity to write a will will be decided by â€Å"lex loci† and not by Mohamedans law. Other Important cases in aspect of the â€Å"lex loci† includes Choa Choon Neoh v Spottiswodde, Isaac Penhas v Tan Soo Eng, Shaik Sahied v Sockalingam Chettiar. Reception of English Law in Malay States. As noted earlier common law and equity was applied in the straits settlements by virtue of the three charter of justice. The charters however did not apply to the Malay states. The introduction of the Resident system in Perak according to the Pangkor Treaty 1874, allowed the introduction of english styled courts by the Sultan and english judges were appointed. It should be noted that beggining with the civil Law Enactment No 3 of 1937,such judicial practise received the official stamp of approvalby legislature. Section 2 (i) of the enactment provides that â€Å"save in so far as other provision has been or may hereafter be mada any written law in force in the federated Malay states,the common law of england,and the rules of equity,as administrated in england at the commencement of this Enactment shall be in force in the Federated Malay states. On case which can be disscussed in terms of â€Å"common law† are the Goverment of Perak v A.R Adams (1914) , which concerns damage to the plantiff’s land by the defendent. The question which was arised was wheter the defendant is exempt from liability on the ground that he was without wilfulness or negligence using his land on the principle that a man must use his own land and not to damnify another. The court found the defendent guilty under all circumstances he is liable for the damage caused. In re the will of Yap Kwan Seng, which the deceased gave direction in his will that his hose and land be held in trust for ever for a family house for ancestral worship and as family burial ground in accordance with chinese customs. The Issue before the court was whether such a custom was valid a not. The arguments made were (1) That the rule against perpetuities does not excist in and should not be adopted in the federated malay states, (2) That even if the rule be applied,the trust are saved from offence agaist it, (3) That having regard to chinese customs the trust should be regarded as religious and charitable and therefore without offence to the rule. During the proceeding of this case it was noted that the rule agaisnt perpetuities has never been applied in the states. However it was concluded that to regard these trust either as trust for religious purposes or as trust concerning or benefitting the community at large or any portion of it,it follow that there is no way to be sa ved or excepted from repugnancy to the rule of perpetuities and are therefore void. In the case of permodalan plantations sdn.bhd v Rachuta sdn.bhd (1985) can be discussed as legal set off which is based on english statute is not included in the expression â€Å"the common law of england†. Only equitable set –off is part of the local law and consequently the court can only deal with and equitable set-off.

Chocolate business plan Essay

Introduction The market leader of the chocolate industry in India, Cadbury, is a British subsidiary of the American multinational confectionary, food and beverages conglomerate â€Å"Mondelez International†. Cadbury, is the second largest confectionary company in the world, close on the heels of Mars, Inc. In India, Cadbury owns a market share of 66 %, significantly ahead of the other multinational company operating the same space for many years, Nestle India, as well as other national, international and regional brands like Amul and Ferrero. Cadbury India began its operations in India in 1948, and has been a trusted and favored brand for decades in India. The market share has decreased from 70-80% in view of entry of other international chocolate companies in the Indian market, however it is still significantly large. Cadbury figures in the Brand Trust Report, 2011 in the Top 100 Most Trusted Brands in India. While Cadbury sells products in several categories such as candy, gum, beverages and chocolate confectionary, this report is aimed at studying the marketing strategy employed by Cadbury India in view of its chocolate confectionary business. Some of the products in this category include the highly popular Dairy Milk, Dairy Milk Silk, Bournville, Temptations, 5 Star, Dairy Milk Shots, Celebrations, Perk and Toblerone. In order to analyze the marketing strategy for Cadbury, this report begins with a SWOT analysis of the company. Environmental Analysis Political Food Safety Act 2006: Detailed and exacting regulations, for standards of production as well as imported chocolates, exist in India. Opportunity. Cadbury is better equipped to follow standards in production than smaller regional or local brands. Strength. Expand into the rural areas before local or regional companies focus on the rural market. Import Tax Rates on Chocolates: A tariff rate of 30% is levied on chocolates. Opportunity. Strength. Demand for premium chocolates at affordable prices can be encashed before foreign entrants can grow their roots within the Indian industry by introducing and aggressively marketing domestically manufactured premium chocolates. Economic Per Capita Spending Patterns: The biggest consumption category in India is Food. Spending in this amounts to almost 21% of the Gross Domestic Production. People, on average, spend 31% of their budget monthly, on food. 70% of the food spending is on agri-products, which incorporates candies and confectionary including chocolates. Two-thirds of this spending is on processed products. Domestic spending on food is expected to grow at a compounded 3 annual growth rate of 4% and billed to reach approximately 320 billion US dollars in value within the next 7 years. USD 841 million is spent on chocolates and confectionary in India. Opportunity. In households across income groups, a large share of money spent goes towards processed agricultural products including chocolates and other confectionary items. This can be encashed by developing effective channels to reach out and sell to lower and lower middle income groups. Strength. Socio-Cultural Social and cultural acceptability of products: There is an increasing acceptance of chocolates as an equivalent of traditional sweets in urban areas. Chocolates are, however, still seen as a luxury food item in rural areas. Opportunity. Chocolates are increasingly being seen as an equivalent or substitute for traditional sweets in terms of the convenience it offers when used for gifting on occasions. Strength. Cadbury is already working on this approach to sell to urban consumers. Rural consumers can also be reached out to and offered chocolates as a new gift item replacing sweets leading to increased sales. Technological Constantly improving technology in chocolate making leads to better tasting products as well as more convenient storage. Opportunity. Strength. Cadbury has the financial capability to invest in R&D and has already produced products that are better suited to Indian tastes and storage conditions that other foreign entrants into the industry are not yet as well adapted to. Natural factors. Climate for Cocoa Production: Cocoa, used to produce chocolates can only be grown in regions 15 degrees to the north or south of the equator. Cocoa, originally a crop native to the Amazon basin, can only be grown in the southern states of Kerala, Tamil Nadu, Andhra Pradesh and Karnataka. It is not a commonly grown crop. Threat. Lack or scarcity of domestic cocoa producers can affect production costs of chocolates within the country. Strength. Cadbury has encouraged farmers in Kerala to produce cocoa since the 1970s and is now in the process of promoting Cocoa as an inter-crop plant for coconut growing farmers. Successful pursuance of this connect with the farmers would help Cadbury procure raw material at lower prices within the country. Consumer behavior Age composition: 66% of the population is below the age of 35. Opportunity. It implies that a huge part of the population can be encouraged to take up consumption of chocolates more frequently and will be met with less resistance than that put up by older consumers with already set eating habits. Strength. 4 Competition Traditional Sweets: Very widely available and traditional choice, but inconsistent in hygiene levels and taste. Threat. Build on image of chocolates being a better and more hygienic choice, which adheres to food safety standards set out by the Govt. Build on image that chocolates are a more sophisticated choice for gifting carrying greater meaning than ‘mithai’ from neighbourhood sweet shops. Strength. Confectionary items like candies, cakes and icecream: Candies are easily available and appeal to children who have traditionally been the target consumers for chocolates. Threat. Cadbury can emphasize more strongly that chocolates are not meant only for children but for adults as well who may not prefer to eat candies. Cadbury chocolate can be offered as an experience, that is not replicated by eating candies and conectionary items. Strength. Entry of several foreign players: As India is seen to have a rapidly growing chocolate consuming country, with people willing to spend not only on inexpensive smaller packs of chocolates, but also premium chocolates as well, foreign players have started foraying into the market with the hope of establishing a presence in the premium sector at least. Threat. Cadbury can increase its foothold in the premium sector of chocolate industry by launching and promoting premium chocolate brands with higher cocoa content which could be priced a bit lower than the foreign brands. In fact, Cadbury is already in the process of implementing such a strategy through the introduction of Bournville and Toblerone. Strength. Suppliers Global network: Half of the cocoa sourced for chocolate making by Cadbury is from sources around the globe, including countries like Ghana, for its famous brand Bournville. Opportunity. Cadbury can source the majority of its cocoa from farmers in India through contract farming, while importing from foreign countries specifically for certain brands only. This will help reduce loss due to global fluctuations in cocoa bean prices and also reduce transport or shipment costs. It will also help create an even more positive image in the eyes of the Indian population. Strength. Dealer network: Cadbury has CSR activities directed at the farmers who are producing cocoa on contract for Cadbury in the state of Kerala. Opportunity. Cadbury is now in the process of extending these activities to farmers in 3 more southern Indian states. This will help cement positive relations between the cocoa growers and the brand, which may put it at an advantage when compared to new foreign entrants in the country like Ferrero or Mars, Inc. Strength. 5 Advertising environment Use of role models: Trustworthy role models in the media, when used as Brand Ambassadors, give a much needed push to the further acceptance of a product. Opportunity. Cadbury has been able to utilize this by roping in celebrities like Amitabh Bachchan, thus emphasizing the idea that even adults can have chocolates, since even a person of Amitabh Bachchan’s stature has not shied away from having them. Cadbury also has the financial power to rope in more high profile celebrities for the same. Strength. Availability of media and ad agencies: Several media channels like TV, Radio, newspapers are available for Cadbury to advertise on. Opportunity. Cadbury has been advertising its chocolates heavily throughout, to keep the brand on top of the mind recall. There have been innumerable ads by Cadbury that have long stayed on people’s minds and even evoked nostalgia, indicating a deep connect of the brand with the audience. Strength. Segmentation Cadbury segmented the consumer based on age. Till the 1980s, chocolates were seen as a luxury item which were eaten only on special occasions or used to reward children with. Despite being the market leader already at this time, Cadbury decided to reshuffle their marketing strategy and position chocolates as a snack and an everyday item of consumption rather than a special treat. In order to do this, the first step was to segment the consumers. Geographic or occupation based segmentation would have proven less relevant in helping raise revenues generated from chocolate sales. The segmentation was done on the basis of age. The existing segment of choice for Cadbury had been children up to the age of 14 who had been driving the consumption of chocolates until the 90s. The other segment that the consumers could be grouped into was the adult population. Targeting The decision made to target a segment is based on gauging the segment attractiveness of the segment. During the 90s, with a rise in the population of the 15-35 year olds, combined with a surge in income and spending power due to the simultaneous opening up of the economy, made the adult segment an attractive one and since then, it has been targeted by Cadbury. Being the market leader already, switching to this target consumer group was not a difficult move for them, in terms of channel attractiveness of the segment. The existing channels which served the consumers until the 90s, such as kirana stores, need no resource intensive special adaptations to serve the youth consumer group as well. Alongside this, competitive attractiveness of the youth segment was also high since no other chocolate company had targeted this consumer group so far. Although this meant 6 Cadbury needed to put in extra marketing effort to change the social acceptance of chocolates in this group, it also translated into a first mover advantage for them. Positioning Positioning is the decision of how the brand wants to be perceived as by the target consumer group vis-a-vis competitors. Cadbury has positioned itself to cater to specific needs and attributes that the target consumer group looks for. Cadbury’s objective was to engage the customers of the adult age group. In the early 90s, Cadbury had the leading share in the market but the volume of sales in terms of per capita consumption was very low compared to western countries. This was also because consumption of chocolate by children was strictly governed by adults and hence increasing per capita consumption within the children consumer group was not a feasible option. In order to widen the net of consumers, Cadbury had to increase the social acceptance of chocolates in the adults age group. This was done through the means of extensive and successively huge ad campaigns which eventually lowered the attitudinal barrier that existed. Cadbury had wanted to and has successfully moved from the perception of chocolate being a children’s product to a celebratory/gifting product, and more recently an indulgence product (For instance Cadbury Silk). In 1992, Cadbury launched a series of aggressive ad campaigns starting with ‘Real Taste of Life† which showcased adults eating the chocolates on their own and not in a parent role or buying it as a reward or a way to say sorry to loved ones. This included the famous ad â€Å"Kuch khaas hai zindagi mein† which showed adults enjoying the taste of chocolates on their own. Later on, Cadbury launched a campaign for Perk which said â€Å"Thodi si pet pooja† which emphasized the use of the chocolate as an any time snack to satisfy hunger, which was a marked shift from the earlier perception of chocolates. Later, to promote Cadbury chocolates as an alternative to traditional desserts, the â€Å"kuch meetha ho jaaye† campaign sought to change perceptions once again, this time including the entire family consisting of elderly grandparents also in the ad to show acceptance of the Cadbury chocolates as dessert. By tying chocolates to Indian customs, and festivals, like Celebrations especially for Raksha Bandhan and Diwali, Cadbury has come a long way from the â€Å"Real Taste of Life† campaign, and â€Å"Indianized† itself in order to entrench itself within the minds of the adult population in India. Marketing Mix – 4 Ps Product/Service Product There are four types of products by Cadbury India, and this report is focused on the Chocolates category. These aim to satisfy the hunger need as well as relaxation and convenience need (easily available snacking option). In order to satisfy these needs, the 7 product is available very easily, at least in the urban markets and in various sizes. Cadbury chocolates are branded so as to represent some emotional core values like family values, and togetherness, but at the same time, they are also branded as a fresh, satisfying, convenient product. Place Cadbury has 6 company-owned manufacturing facilities: 1. 2. 3. 4. 5. 6. Thane Induri (Pune) Malanpur (Gwalior) Bangalore Baddi (Himachal Pradesh) Hyderabad There are 4 sales offices, one each in New Delhi, Mumbai, Kolkata and Chennai. The corporate office is in Mumbai. In terms of distribution, Cadbury chocolate products are sold directly to wholesalers and retailers. The network comprises roughly 2100 distributors and 4,50,000 retailers. The chocolates are sold through Kirana stores, gift stores, medical stores, canteens, paan shops, bakeries and so on. Price The generally established price point for chocolates in India is Rs 5 and Cadbury has 4 products at this point including Dairy milk, 5 star, gems and perk. This price point accounts for half of chocolate sales in India. At the same time, Cadbury sells multiple differently sized packs on a range of prices, going up to higher, premium priced products as well such as Bournville. In this way, Cadbury has a hold on various price points available to various groups of consumers based on their appetite for spending. Promotion Cadbury promotes its products through various media channels. It uses mainly television ads with strongly featured taglines that get associated with the products easily. There is some amount of seasonality in the market in the way that demand ideally goes up during festive season due to gifting needs and Cadbury launches special ad campaigns around those times to encash on this increased demand. National level competitors like Amul have been unable to match up to the scale of promotions undertaken by Cadbury. Regional players hardly advertise on a big scale through campaigns. However, its MNC competitor Nestle has its own promotional ads and campaigns that seek to rival Cadbury’s and sometimes directly challenge the Cadbury ads. 8 Recommendations 1. In view of the recent entry of foreign players in the market, though Cadbury does not face the threat of losing a significant amount of its existing customers, for instance, those who buy Dairy Milk or Perk, there is a possibility of losing out on potential customers who are interested in premium chocolates. Since this is a rapidly growing industry, and being the established market leader, Cadbury should focus on its premium chocolate brands in a big way through more visible ad campaigns and promote their products based on the brand equity they have built through the years. 2. While leveraging the lower cost of Cadbury premium chocolates vis-a-vis foreign chocolates, Cadbury must take care to ensure it does not go the Tata Nano way, as lower prices in the premium segment may be perceived as lower quality in the product delivered as well. 3. As it has already managed to successfully position chocolates as a snack for children’s as well as adults’ consumption, it can now focus on activating the elderly consumer segment which is typically more resistant to chocolates compared to traditional sweets and feel guilty on indulging in chocolates even if not restricted by health reasons. 4. Cadbury can now change the positioning of certain specific products or introduce new products to cater to â€Å"instant energy† giving needs similar to Mars bars abroad. 5. Recently, a 20-calorie chocolate has been developed in the UK which is now being sold at Michelin starred restaurants. Cadbury can also direct some of its R&D endeavors towards developing a similar product which would give the company a distinct edge over competitors and help tap into a new markets and increase their consumer width. 9 NATIONAL BRAND 10 Introduction Amul is an Indian dairy Co-operative based out of Anand in Gujarat. The co-operative started off as the Kaira District Co-operative Milk Producers Union in December 1946. The Co-operative was set up by the milk producers of the Kaira district of Gujarat who felt cheated by the unfair trade practices. The co-operative collected processed and marketed milk and was co-owned by the milk producing farmers of the district. The brand Amul was used by the Kaira District Co-operative to market its brand of milk products. By the 1970s the Co-operative model had become highly successful and spawned similar Co-operative in other district s of Gujarat. In order to combine together and expand their market while not competing with each other, the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), an apex marketing body of these district co-operatives was set-up in 1973. The brand name of Amul which was held by the Kaira Union was transferred to GCCF. Today, the GCCF is the largest food product marketing organisation of India. The co-operatives collect around 10 million litres of milk per day from around 3 million milk producer members of the Co-operative. Its current turnover is around Rs. 140. 0 billion. Amul started producing and marketing chocolates in 1970. It currently markets 6 different chocolate brands namely Congtas, Fundoo, Chocozo, Bindaaz, Rejoice, Almond Bar, Fruits and Nut and Amul Cooking Chocolate. Current market share of Amul chocolates is just 4% as compared to market leader that is 66%. The main reason behind such low market share is lack of promotion and more focus on dairy products. Environmental Analysis Strengths ? ? ? Raw material (milk) security: Major raw materials for the production of chocolates are Cocoa, milk and sugar. Milk supply is secured for the company which protects it from any volatility in prices. High brand awareness: Amul through its concerted marketing over the last 5 decades has created a brand that is synonymous with good quality. The brand has also become a symbol of successful Indian entrepreneurship that has positively impacted the lives of millions of small farmers, hence there is a sense of patriotism and pride associated with the brand as well. Strong distribution network: Amul has been marketing and supplying milk through a pan India distribution network which supplies milk and milk products to independent retailers but also to its own milk parlours. 11 Weakness: ? ? ? Low market share: Amul chocolates have a low market share in the Indian chocolate industry. The brand, though having a strong recall value, is not primarily associated with chocolates. The market leader in the chocolate industry in India is Cadbury with 70% market share followed by Nestle at 20% market share. Co-operative structure of Amul: Due to the Co-operative nature of GCMMF, there is limited capital infusion in the company. As a result there is a limited scope for aggressive product launches or diversification. Volatility in Cocoa prices: Unlike the major chocolate producing companies in the world, Amul does not own a cocoa plantation. The prices of cocoa are volatile in nature as they are dependent on the international demand supply dynamics. Not having a cocoa plantation of its own exposed the company to volatility in prices of this raw material. Opportunities: ? Huge untapped market: The per capita consumption of chocolate in India has increase from 40 gm per person in 2005 to around 110 gm per person currently. Though this is impressive growth in itself it is still much lower than the per capita chocolate consumption, in countries like Ireland or Belgium which have a chocolate consumption per person of more than 11 kilograms or even USA or Australia which have chocolate consumption per person of around 5 kilograms. There is thus a huge untapped market for growth in the chocolate industry in India. Corresponding Strength: Since Amul has a strong â€Å"Brand awareness†, people would be willing to buy new products launched under its brand name. Amul can launcha variety of new chocolate products for youth and kids. ? Gifting: Gift hampers consisting of chocolates has been a successful marketing strategy by companies like Cadbury. Amul too has the ‘Rejoice’ brand especially for this purpose however there is scope to launch or aggressively advertise this. Corresponding Strength: Since, Amul is a strong brand name and has a strong distribution network, It can very well advertise the gift packs like rejoice and can introduce new brands catering to the same need. ? Advertising: Amul need to advertise and carry out lot of promotional activities to inform the consumers that still exist and can provide them with what they want. It’s been years that Amul’s chocolate advertisement has been telecasted on India’s major television channels. Sales promotions like discounts and free samples can also help them to increase the Brand awareness and attract customers to switch brand from competitors. Big brands use a celebrity as a Brand Ambassador for its product. 12 For example Amitabh Bachchan for Cadbury & Rani Mukherjee for Nestle, Amul can also use a brand ambassador for the promotion of its chocolates. Corresponding Strength: Amul has a huge turnover of around Rs 140 billion and is a financially strong company and has enough funds to carry out the needed advertising campaign and promotions. By spending a small percentage of revenue on advertising campaigns Amul can increase its market share to a large extent. ? Low rural penetration of chocolates: There is significant awareness of the Amul brand even in rural India. The company can leverage these launch cheaper brands targeted at the rural segment which has till now stayed away from chocolate consumption. Corresponding Strength: Amul has been marketing and supplying milk through a pan India distribution network. It has a strong distribution network in rural areas. Amul can leverage this strength and can launch cheaper products in rural market. Threats: ? Strong competition from foreign multi nationals: There is significant potential in the Indian chocolate industry which has been attracting international competition. Companies like Cadbury have been launching premium swiss chocolate brands. Also other premium chocolate brands like Ferrero Rocher are making their presence felt in India. Corresponding Weakness: Since â€Å"Amul† is mostly related to its milk products and has not made its presence felt strongly in the chocolate industry, its still far behind its competitors like Cadburys which is a very aggressive player in the chocolate industry. Amul faces tough competition and to handle the same it needs enormous marketing and advertising campaign and introduction of new chocolate products under its brand name. ? Low brand loyalty in chocolate industry: Chocolates are impulse purchases and compete with categories of soft drinks, snacks and other beverages. Although people may like a particular type of chocolate (dark, milk, white, etc. ) there is not a significant brand loyalty. Hence this presents a threat to established players in the market. Corresponding Weakness: Since Amul has significantly low popularity in chocolate industry and also people are picky while selecting a chocolate, there is not a single chocolate brand product under its brand which enjoys strong loyalty from consumer side. Also, people like to try different kinds of chocolates and are not necessarily inclined towards a single chocolate product. Since, Amul does not offer a large variety of chocolates; therefore it is at a weaker position in the chocolate industry. 13 Segmentation Geographic segmentation: Chocolate consumption is concentrated in urban areas of the country. Chocolate consumption in rural areas of the country may be considered negligible. Chocolates are still considered as a luxury product by the population and are hence consumed by the middle and the upper classes of society which reside in the towns, cities and metropolitan centres of the country. Amul chocolates are thus marketed in these areas of the country. Demographic segmentation: Amul chocolates are mostly segmented its consumers into various age groups like the children, adolescent and youth segments of the society. Since, chocolates are particularly liked by children and middle aged and older generations refrain from eating it citing health concerns due to high sugar content of chocolates. Targeting The brands of Amul chocolates like Fundooz, Bindaaz, Congrats etc. have been named to be attractive to the younger generation who use these words in their daily lexicon. There has been a strategy by the company to provide a young, dynamic and fun loving character to its chocolate through such branding. Amul chocolates also markets two brand namely Amul Cooking Chocolate which is targeted towards the homemakers and professional cooks and chefs. Positioning Positioning is the decision of how the brand wants to be perceived as by the target consumer group vis-a-vis competitors. Amul has positioned itself as an affordable, â€Å"value for money† chocolate. Since, it has mostly targeted kids and youth, it is still considered as a snack unlike cadbury’s product like Celebrations which is considered as gifting option. Amul has not positioned itself as an alternative to sweets or has not developed its product to actually cater to an emotional need. It is simply a chocolate available at a lower price. Marketing Mix. Product Amul has a very low range of products in its chocolate business. There are only 8 chocolate brands that Amul offers as of now in the market and these are Congrats, Fundoo, Chocozo, 14 Bindaaz, Rejoice, Almond Bar, Fruits and Nut and Amul Cooking Chocolate. The problem is that there is no clear differentiation between the products that it offers. For example Cadburys is catering to a different need corresponding to its individual Chocolate product. ? ? ? ? ? Product Dairy Milk Dairy Milk Shots Bournville 5 Star Perk Need Milk Chocolate (Basic taste and style). Small balls of chocolate (Circular unlike chocolate bars) Dark Chocolate Sweeter in taste with honey as an ingredient Crispier with wafer inside However, Amul completely ignores such kind of differentiation between its products and hence their product can be easily substituted by their own products apart from the competitor’s product. Another important factor is packaging because majority of the consumers is kids and youngsters who like attractive packaging. Most kids buy chocolates not just because they like chocolates but also because of the attractive wrappers. Packaging used by Amul stands low on appearance parameter. Also, it lacks a common theme or â€Å"top of the mind† recall point. For example, Cadburys is strongly associated with blue wrapper and more than brown it’s the colour blue that we associate with a chocolate. As compared to this, Amul’s packaging is weak and lacks lustre. Amul needs to make changes to its product (chocolates) like introduction of more flavours and attractive packaging because the wrappers Amul uses is not at all attractive compared to those used by Cadbury and Nestle. This would keep them in competition with competitors like Cadbury and Nestle. 15 Pricing Second P of marketing that is Price is often confused with blindly lowering the prices of different products and completely relying on this strategy to increase sales. However it is of extreme importance to divide the target group on the basis of their price sensitivity and purchase power. Every customer segment has different price expectation from the product. To maximize the returns, it is important to identify the right price level for each segment and then progressively moving through them. Amul has launched various chocolate products to cater to different segments of population. Pricing must take into account the competitive and legal environment of the industry. Majority of people in India live in villages and have low disposable income. With such a heavy competition in the chocolate market, Price plays a very important role. Amul pricing strategy has been â€Å"Value for Money†. Amul’s believes in giving value for money to its customers and it has always followed that principle. Its products are of high quality and available at affordable prices. For example, Cadbury’s â€Å"Fruit n Nut† is priced at Rs 35 per 42 gm pouch whereas Amul’s Fruit and Nut is sold at just Rs 25 per 40 gm. Amul offers same quality at a price 30% lower than its competitor. Amul has not launched any premium (high price) product in its chocolate business. Place Place in marketing is considered as the channels of distribution through which products move from the manufacturer to the consumers. The channels of distribution mean intermediaries or middlemen who act as a link between the manufacturer and the consumers. Factors that need to be considered when choosing the place are the characteristics of the product, characteristics of the buyers, control and competitors channels. Since chocolate is an edible product, Amul should adopt an intensive distribution strategy wherein they will manufacture products and make it available at various shopping malls, food joints, local stores, Chocolate parlours etc. Corresponding to its strong distribution channels, Amul currently has very low visibility. It needs to increase the visibility through offering discount to retailers along with buybacks to convince them to store the Amul Chocolates. Since Amul is a â€Å"value for money† brand it can be placed anywhere from small kirana shops to big malls. Amul has a big brand name because of its dairy products. They can easily use it to increase the awareness of its chocolates using various distribution channels. 16 Promotion Promotion refers to exchange of information between an organization and the consumer of its products. Consumers here include Customers, shareholders, employees, government and other parties related to the products like trade union and media. The aim of promotion is to inform the consumers, differentiate from other products and to persuade them to buy. There are many techniques of promotion like Advertising, Sales promotions, Direct Marketing & Personal selling. Amul has been criticised for lack of promotion. Amul has a strong brand name because of its dairy product leadership. Amul must advertise its chocolates using media like newspaper, television and internet to inform the public about the quality & the price of its product. Amul has totally shifted its focus from chocolates towards milk and other milk products and have totally ignored chocolates. Using the mediums like Television and newspaper the company needs to remind the public that they are back with improved products at an affordable price. 17 Recommendations 1. Amul needs to introduce new varieties of chocolates and improve its existing ones. 2. They should introduce milk chocolates like Nestle’s Milky Bar, Chocolates with fruits and nuts like Cadbury has its Fruit and Nuts, Mint chocolates like Nestle’s After Eight etc.

The Economic Growth Of China - 1503 Words

Over the past three decades in China, it goes without saying that it was miracle that economic growth increased rapidly. For the size of gross domestic product (GDP), China grew by around 10% per year on average, so that it became the second largest economy in the end of 2012, behind the United States. During the last 30 years, the GDP per capita raised from $205 to $6075. One of the most crucial achievement is that China, the largest exporter and the second largest importer, ranked NO.1 in the world for foreign exchange reserves, reaching $3.3 trillion. However, despite the benefits for achievement in China, the problem also cannot be ignored. Because of the rapid population growth, people got great pressure for the cost of†¦show more content†¦China focused on economic and technological development, coastal economic development, riparian regions development, and island regions development, in order to get wider for outside world and obtain more opportunities through the ec onomic globalization. The trade and investment was the most important driver for sustainable development. Meanwhile, China started to consider more about the disadvantaged agriculture and service industries from the advantaged manufacturing industry. Hence, as the result of the opening-up policy, China not only promote its own economic and technological development, but also benefit in interaction with the rest of the world. In addition, continuously improved economic structures was also a main factor. In 1987, industrialization and urbanization were the two major drivers for economic development. There are two ways to make productivities more efficient. On the one hand, as a developing country, it is more benefits that hiring more labors and supporting the urbanization. On the another hand, population is the biggest problem that people need to think about it. If the real urbanization ratio in China is lower than the developed countries, or lower than the average of the developing countries, it is difficult to follow the process of urbanization to support economic growth. The last main factor for rapid economic growth is high savings andShow MoreRelatedChina Economic Growth774 Words   |  3 PagesEconomic growth means the increase in the real GDP over time. It can be caused by an increase in an aggregate demand or aggregate supply. However, long-term economic growth mainly results from an increase in aggregate supply for instance increased capital, etc. Growth accounting is the tool to estimate the contributions from various sources to economic growth. It is the growth of GDP explained by weighted growth rates of other variables. 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