Feasibility Study of the Industry and Target Market

The expansive and cutthroat confectionery and chocolate sector would house the projected Zak’s Confectionary enterprise. According to the National Confectioners Association (NCA), the increased customer demand for chocolate is a result of the goods’ positive health effects. Specific minerals and antioxidants found in chocolate reduce a person’s risk of developing cancer or suffering a heart attack. The confectionary sector has gained new customers (adults) as a result of this health development. Chocolate is now seen as a healthy snack for people as well as a luxurious good. As a result, the products are now more in demand everywhere. As a result, there have been several new entrants in the industry who are eager to get a share of the massive market that is hard to satisfy with the current organizations.

The global chocolate industry has been expanding due to the increased demand for the products. By the end of 2016, the worldwide chocolate market experienced annual sales of approximately 98.3 billion dollars (Filieri, 2013). This return signifies a 4 percent yearly growth rate. The chocolate industry in the U.S, where Zak’s Confectionary will be situated, is relatively increasing due to the high demands of consumers which have expanded the market share to over 86% (Bharucha, 2016). The U.S exports majority of its confectionary products to all parts of the world and thus helping the economy of the country by generating a lot of revenue through exports and local sales.

Competition Analysis

Many established companies in the chocolate market industry have a consistent large share of the supplies. Some of the organizations with the largest annual Net sales include Mars Inc, Ferrero Group, Mondelēz International, Hershey Company, Nestlé SA, Meiji Company Limited, and Ezaki Glico Company Limited, just to mention but a few (Squicciarini & Swinnen, 2016). The leading producer in the confectionary industry is the Cadbury Company which has a global market share of approximately 70% (Bharucha, 2016). Some of the leading brands for the company include Éclairs and Dairy Milk chocolates. Mars and Hershey companies are two of the most competitive players in the U.S chocolate industry because of their large clientele base in the country.

The confectionary industry has a huge market in the world and the key players can not all satisfy the customer needs that keep rising. Therefore, there is at least 40% of the chocolate market that lacks steady supply patterns. Close to 73% of the demand for chocolates is in the urban market (Tickle-Degnen, 2013). Therefore, the products have a price sensitive market that allows for producers and suppliers to increase their sales by constantly having varying prices for the commodities. As a result, the presence of the big companies like Nestle, Mars, and Cadbury does not lock out any new entrants into the confectionary market because of the large consumer market.

Target Market

The target market for Zak’s Confectionary is the untapped section of consumers who do not have ample time to go to shopping malls. Zak’s Confectionary Company will be able to deliver the products to clients who will make online purchases from the company website. A majority of the chocolate products from companies like Nestle and Mars are mostly available in malls which are situated in the urban regions. Thus, the demand for some of the consumers in rural areas is not met due to lack of supply (Squicciarini & Swinnen, 2016). Zak’s Confectionary will, therefore, have the opportunity of targeting this market share which is available.

Chocolate consumers will order online for the products that they wish to have, and the company will deliver them to the outlets. Zak’s Confectionary will establish delivery outlets at almost convenient places in all the states of the United States. The target market for the company will spread to the neighboring countries of the U.S where consumer demands for chocolates have not been met by the leading organizations in the confectionary industry.

Product, Price, Place and Promotions

Zak’s Confectionary will produce and supply delicious chocolates and confections for consumers in the U.S and its neighboring countries. The company targets the unique needs of the clients, and therefore it will strive to manufacture products according to customer demands and expectations. Zak’s Confectionary is also targeting low-income earners, and that is why the price for the chocolates will be relatively affordable as opposed to the prices of other competitors. The confections and chocolates will be packed in different sizes so that there is an increase of purchases.

The company will make use of e-commerce through an online purchasing website where clients will make their orders and purchases. This choice of purchasing platform will increase the number of sales because it saves time and money for customers who want to receive the products in the comfort of their offices, houses, or schools. Zak’s Confectionary will have convenient delivery outlets which are available to all their clients. The company will also have promotion services like gift coupons and free delivery services for customers. The company will be rewarding loyal customers with coupons as a way of appreciating their consistency in buying their products. The promotions will be substantial because they will be retaining the existing customers and attracting new ones.

References

Bharucha, J. (2016). Cadbury Vs Nestle: A Study of The Chocolate War. International Journal

of Research in Social Sciences, 6 (9), 609-620.

Filieri, R. (2013). Consumer co-creation and new product development: A case study in the food

industry. Marketing Intelligence & Planning, 31 (1), 40-53.

Squicciarini, M. P., & Swinnen, J. (2016). The Economics of Chocolate. New York: Oxford

University Press.

Tickle-Degnen, L. (2013). Nuts and Bolts of Conducting Feasibility Studies. American Journal

of Occupational Therapy, 67 (2), 171-176.