Darrell Lea Chocolate Shops’ Rocklea Road

1003MKT Introduction to Marketing

Situation Analysis for

Darrell Lea Chocolate Shops’ Rocklea Road

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Introduction and Company Background

Introduction

While the Rocklea Road is among Darrell Lea’s best products, repositioning it would complement the restructured administration. The main problem with Darrell Lea Chocolates Shops’ Rocklea Road is that there is very little investment in media advertisement and considering the recent change in administration, customers are not very sure as to where they can buy Rocklea Road and other products. Also, operations only occur within Australia yet this beloved and praised product could have the company realize unimaginable profits were they to conduct operations, other than sales alone, in other countries.

Company Background    

Founded in 1927 by the Lea family, Darrel Lea Chocolate Shops had about 81 privately- owned shops and over 1000 outlets. Their area of focus was in the chocolate and confectionery industry, producing and selling a range of chocolates, liquorice, and confectionery. In 2012, however, after the directors agreed there was uncertainty in the company’s financial future, it was sold to the Quinn family, who put it into administration and restructured it. The restructuring involved cutting down on a lot of the retail jobs and closing down of all retail outlets owned by the company. The company now distributes via supermarkets, only about 300 of the initial 800 products they used to sell.

Situational Analysis

Market Analysis

The confectionery industry, in 2012, had a total value of US $3.9 billion with the chocolate value sales accounting for US $2.55 billion of that total. The value growth between 2008 and 2012 was at 18% while volume sales were at 142,000 metric tonnes, showing a 10% volume growth since 2008. The leaders in the market ranked as; Mondelez International (who own Cadbury), followed by Mars, Nestle, Lindt, and Ferrero (Nieburg, 2013).

The industry, however, has had a slight decrease in growth due to increased awareness and demand of health issues related to high sugar content, and also due to the price of cocoa. In 2014, the chocolate confectionery growth rates in Australia declined by 2.2% with trends towards more healthy foods increasing. A Nielsen Global Survey found that 64% of Australians consider themselves overweight and more than 80% are trying to lose weight through diet change (Nielsen Global Survey, 2012). However, much hasn’t changed in the leading players with the major change being observed is the increased competition between Lindt and Cadbury, with prospects of Lindt overcoming the latter increasing by the day. As for Darrell Lea, even though they are now recording positive cash flows according to Rex Devantier, the general manager for VIP PetFoods, they still have a long way to go to get back to the top where these leaders are.