Marketing work

Main Discussion Post: Due by Sunday

 Develop a pricing strategy for your chosen product/service.

• Discuss what factors will impact your pricing strategy.
• What pricing method would you use for your product/service and why?

These two questions require research using the textbook (Chapters 13 & 14). No other resources are required. Citations and a reference list are required for this post.

Your main post on the discussion must be submitted by Sunday.
The post should be 2-3 paragraphs in length (or at least 250 words) 

Running Head: CHOCOLATE INDUSTRY 1

CHOCOLATE INDUSTRY 3

Chocolate industry

Latoya Rush

Marketing

AIU

10/10/12

There are various types of chocolate bars especially in the United States. These bars belong to different companies that all compete to get a niche in the market. However, due to the high number of entrants in this market, there is a lot of competition in the market for chocolate bars as some companies have already established themselves compared to others. To obtain a greater share of the market, massive marketing efforts are required from these new firms.

The three musketeers is one chocolate bar brand that is popular in the United States market and has been in the market for a long time; since 1932. What was appealing to most buyers of this chocolate piece since the early times was the fact that it was very big and was going for only 5 cents. Since then, the firm has continually made changes to this brand through introducing other brand extensions and this has saw the firm gain more customers and obtain a larger market share. This product belongs to the chocolate industry and due to competition; strategies must be applied if the product is to remain in the market (Smith, 2006).

This product is affected by the following market environmental forces; transportation costs, the cost associated with the cocoa that is used in the production of the chocolate bar, and finally, competition in the market for chocolates. All these factors affect the 3 musketeers chocolate bar brand as it interacts with consumers and the entire market (Groucutt, Forsyth & Leadley, 2004).

A) The price of cocoa

First of all, the price of cocoa is a very significant factor in the process of making chocolate bars. For instance, when the price of cocoa is set at a high price, it implies that the overall cost of the 3 musketeers piece of chocolate will be high and this can lead to the firm losing clients s they seek cheaper chocolate pieces. Generally, the price of cocoa as a raw material for the making of chocolate bars affects the pricing decision of the final product. Therefore, if a competitor of the 3 Musketeers such as dairy milk which is from Cadburys incurs lower production costs such as low costs of cocoa, then it will definitely charge cheaper prices for the chocolate bar brand. This will attract more customers especially those who are price sensitive, to purchase the cheaper brand (Smith, 2006). Therefore, the price of cocoa, as a raw material for the making of chocolate brands, affects the pricing decision of firms in the industry and therefore this affects the 3 musketeers chocolate product as it can either work for or against the competition for this chocolate brand.

B) Transportation costs

Transportation is very crucial to any product as it determines the time within which the product will be available to the consumers. Most importantly, transportation of products determines their pricing. When the costs for transportation are high may be due to a rise in the price of fuel, the overall costs of the product is affected and this also affects the buying decisions of consumers. Therefore, if the transportation costs for the three musketeers from the suppliers to the stores or retailers are high; this will affect the price of the product as this will be adjusted in the final commodity price (Michman & Mazze, 1998).Therefore, the best thing for the 3 musketeers chocolate bar company is to ensure that the supply chain is shorter to reduce the costs incurred in the supply chain as they affect the final commodity price. When the supply chain is shorter, the costs increase is lower and therefore the final product will not be expensive. This will therefore be advantageous to the firm as it will attract more and retain the existing customers.

C) Competition from other products

The other environmental force affecting this industry is competition. Competition is a major factor that affects all industries. However, in order for the 3 musketeers to stay at the top compared to other competitors in the market, the firm can use strategies such as charging lower prices for its products, and increasing the size of the commodity compared to that of the competitors while charging the same price as it will give them additional utility and attract more customers. The other strategy is to ensure that products are available as and when required by the customers (Michman & Mazze, 1998).

Explore strategies to overcome the threats

In order to outdo the threat such as competition from the market, the firm can increase the value of the product in the eyes of the consumers through; increasing the sweetness of the chocolate bar, coming up with more flavors for the product such as the mint flavor and the strawberry flavor. The company can also provide the customers with more value for the product by making the product with much healthier ingredients that are less harmful to the body; for example, reducing the sugar level and increasing the milk content of the chocolate bar. To reduce the high transportation costs that lead to a high price for the overall product, the firm can shorten the supply chain to cut down on the costs increment in the supply chin that leads to a high pricing for the product (Groucutt, Forsyth & Leadley, 2004).

Explore strategies to take advantage of the opportunities.

These strategies may include; using high quality products that are lowly priced to cut down on the costs. The firm can also maximize on the opportunities by getting into strategic talks with the best experts in the production sector of the product in order to gain helpful information for doing better (Groucutt, Forsyth & Leadley, 2004).

Conclusion

When thorough analysis of the environmental factors affecting the chocolate industry is conducted, there can be efficiency in terms of the delivery of the product to the final consumer and at a favorable price compared to that of the competitors.

References

Groucutt, J., Forsyth, P., & Leadley, P. (2004). Marketing: Essential principles, new realities. London [u.a.: Kogan Page.

Michman, R. D., & Mazze, E. M. (1998). The food industry wars: Marketing triumphs and blunders. Westport, Conn: Quorum.

Smith, A. F. (2006). Encyclopedia of junk food and fast food. Westport, Conn. [u.a.: Greenwood Press.