Republic of the Philippines

UNIVERSITY OF NORTHERN PHILIPPINES

College of Business Administration and Accountancy
Graduate Studies in Business
Heritage City of Vigan

STRATEGIC
MARKETING PLAN
In Partial Fulfillment of the Course Requirement DBA 310
Global Marketing

SUBMITTED BY:
MARY ROSE S. ABANIZ
DBA-1

SUBMITTED TO:
GENEROSO GUDELIO P. PAJARILLO, Ph.D
Subject Professor

April 2018
 INTRODUCTION

Malagos Chocolates continuously expound the local chocolate products of the

Philippines to the foreign markets especially the product was given internationally-

accredited awards for product quality and satisfaction as an edge of starting to branch

in international countries.

This marketing plan introduces the product in the South Korean market due to

the chocolate demand of the country in putting-up strategies and tactics based from the

company’s marketing objectives.

Globally, the increasing demand of cocoa trees that turns into cocoa products

such as tableya, cocoa drinks and the most popular product, chocolates are being

emphasized. According to World Cocoa Foundation Market Update (2014), Cote D’Ivoire

in Africa ranked topmost cocoa producer in the world that was been exported in United

States, Europe and in some Asian countries that approximately 33% of the global

production of cocoa in the world. Furthermore, the typical farm in Africa covers two to

four hectares (five to ten acres) in which each hectare produces 300 to 400 kilograms

of cocoa that covers the increasing demands of cocoa as the core ingredient of making

chocolates from the top chocolate industry producers in Europe and North American

countries considered as the large consumers of cocoa.

 Recently in the year 2015, the agriculture sector particularly in Davao region

encouraged the cacao grower and farmers to cultivate and produce more when the

unknown brand of chocolate produced in rural are in Davao City, Malagos Chocolate

starts winning awards in renowned international competitions in 2015.

 BACKGROUND OF THE COMPANY

Malagos Agri-Ventures Corporation (d.b.a. Malagos Chocolate) is

a Philippine bean-to-bar chocolate manufacturer based in Davao City.

The firm's history dates back to 2003, when company founders, Roberto and

Charita Puentespina leased farm land in Malagos in the Baguio District of Davao City

where cacao trees were already in the area. Charita Puentespina then rehabilitated the

farm which enabled the harvesting of cacao pods from the trees. She would use the

harvested cacao beans to make tablea by roasting them in firewood then grinding and

molding them. The resulting chocolates were found to have a silky flavor.

In December 2007, the cocoa sustainability team of Mars,

Incorporated connected with the Puentespinas to establish the Mars Cocoa

Development Center where the farm of the Puentespinas learned agricultural practices

related to cacao.

This venture led to the establishment of the Malagos Agri-Ventures Corporation

on October 2012 and the firm began producing single-origin cocoa liquor. Malagos

Chocolate was commercially launched in June 2013 and began producing other

chocolate products.

With a plantation of cacao seeds in Davao City, its very own Malagos chocolates

have become a popular kind of chocolate in the world. It won the Silver Award at the

Chocolate Competition in Germany for its tree-to-bark unsweetened chocolate made

from pure cacao beans. Malagos chocolates are exported to Singapore, London, US,

and Japan.

VISION

To become one of the preferred sources of premium chocolates for the world.

MISSION

We aim to maintain a reputation for ethical and sustainable farming, for

production processes that adhere to strict quality standards, and for steadfastness in

upholding excellence in everything that we do.

GOALS

1. Financial goals

 To have a real (inflation adjusted) growth in earnings per share of 5% per

year over time.

 To obtain a return on equity of at least 10%.

2. Non-Financial goals – Act Globally, Think Locally!

 Increase market share by introducing an additional product from the

Malagos chocolates line other than the existing products.

 To be among the Top 10 chocolate brands in the South Korea.

 Maintain the brand image of Malagos Chocolates.

  Increase awareness and retention by creating a Korean facebook fan page

and twitter account.

 To achieve national distribution in two supermarket chains in 2019 and

five by 2020.

The Marketing Objectives

 To increase potential sales through promotional programs planned through the

year especially during the holiday seasons.

 Repackage Malagos Chocolates so that it's new look will appeal to the

customers considering that will be tagged as a low calorie snack.

 Continue to expand globally and have a stronger presence

in foreign markets and with a special focus in their declining Asian market.

 Promote their core brands through numerous TV and magazine ads.

 To leverage existing products to new markets and consumers.

 SWOT ANALYSIS

Internal Strengths
 They export to 4 different countries.

 The company has won international awards.

 Has sales exceeding its target yearly.

 They are the leader in the Philippines of dark and premium chocolate

segments.

 The product is made from Tree to Bar through the efforts of many

people especially farmers.

 The product has more distinctive and pronounced taste.

Weakness

 Price inflation

 There has been a recent decline in the Asian markets.

 Chocolate is not considered a healthy snack and the population is

becoming more health conscious.

Opportunities

 To increase global trade even further.

 To take advantage of the holidays such as Valentine’s day.

 Expand the production of cocoa in other countries

 To produce a new edition of Malagos chocolates that are Fair Trade

certified.

 Possibly some chocolates that is organic for the health conscious

market.

Threats

 Other companies have a stronger presence internationally.

 Government policies and regulations make the company become more

eco-friendly therefore causing them to invest more of their revenue.

 Rising prices of gas increased the overall price

 COMPETITORS IN THE CHOCOLATES MARKET

Currently, the Malagos Chocolates has the leading market share in the domestic

area. However, in international countries, it is trailed by Mars, Nestle and Cadbury. To

penetrate a new target market like South Korea, Malagos Chocolates need to examine

the competitors in the market.

Most used chocolate brands in South Korea as of March 2017 were the following:

1. Lotte Ghana

2. Haitai Free Time

3. Ferrero Rocher

4. Orion Hot Break

5. Lotte ABC

6. Lotte Dream Cacao

7. Lotte Crunky

8. Crown Minishell

9. Kinder

10. Sneakers
 MARKETING PROGRAM

The four marketing elements of the Malagos Chocolates marketing program are

explained in detailed in the following strategies regarding product, price, promotion and

placement.

PRODUCT STRATEGY

Product Line. Malagos Chocolate is available in a variety of types. Other types

will be introduced into the South Korean market during the period of operation:

1. Malagos bar – milk chocolate, dark chocolate, hazelnut, caramel crisp

2. Malagos rolls - milk chocolate, hazelnut, caramel

Unique Product Quality. Malagos chocolate get its rich flavor and quality from

using the cocoa bean and transforming it using a unique formula that gives the

chocolate a hint of distinctive flavor that melts in your mouth.

Packaging. Malagos chocolates are packaged in brightly colored wrapping with

bold and animated replicas of the chocolate in the package. Holding a high standard of

suing environmentally sustainable products. Malagos chocolate has changed the

materials in the twist bag and changed the cardboard quality in the chocolate boxes or

containers to use more recyclable materials.

PRICING STRATEGY

PRICES OF MALAGOS CHOCOLATES

Type of Chocolate PHILIPPINE PRICE SOUTH KOREAN PRICE

1. Cacao De Davao 100% Php 164.75 3,295 Won

Chocolate Callets

2. Malagos 65% Php 179.75 3,595 Won

Dark Chocolate

3. Malagos 72% Php 209.75 4,195 Won

Dark Chocolate

4. Malagos 85% Php 239.75 4,795 Won

Dark Chocolate

5. Malagos Unsweetened Php 179.75 3,595 Won

Chocolate

The Malagos chocolate is priced around 3, 295 to 4,795 won and it is priced at

the same margin. The taste, environmentally sustainable ingredients and affordable

price give Malagos chocolate an advantage in the chocolate market of the South Korea

compared to other Premiere European and US chocolates.

PROMOTION STRATEGY

The main promotional channels for Malagos will be through: in-store promotions,

end of aisle displays, free samples, distribution discounts and print advertising. All

promotional items will have the signature phrase “Mmm…Malagos.”

 In-Store Promotions. It will be conducted in popular grocery stores. The

promotions will consist of buy one get one free (BOGO), 10-20% discounts on chocolate

bars. Promotions will take place every two months to increase awareness of the brand

and purchase in the South Korea.

End of Aisle Displays. It will be put up in the popular agency stores in the

target markets. These displays will have both rolls and bars in milk chocolate and

caramel, at a lower price. This will increase customer acquisition and purchases.

Free Samples. In order to get customers familiar with the brand, Malagos will

have a representative grocery stores and other chains in the target market gicing taste

samples to potential customers every month for five months. These free samples will be

given regularly in the targeted stores in order to increase purchases.

Distribution Discounts. It will offer the confectionary wholesalers a discount

on the products.

Print Advertising. To raise awareness about Malagos, the company will

advertise in popular magazines that are targeted more towards women. It is important

to translate the message of great tasting chocolate but creating an appealing as that

users hold imagery and scenes that tell the story of “Mmm…Malagos.”

PLACEMENT/DISTRIBUTION STRATEGY

Malagos Chocolate will be manufactured in the Philippines for the first year of

operation. It will be exported in the South Korean market. Malagos chocolate will

identify a confectionary wholesaler who will identify supermarket chains, specialty

stores, convenience stores, drug/discount stores making it the most important link in

the supply chain. This would be the best choice when penetrating the market because it

gives Malagos the greatest chance of reaching the target market in large numbers.
 IMPLEMENTATION OF THE PLAN

Introducing Malagos Chocolate to the South Korea is a hard to reach task and

requires an extensive marketing plan to make a successful launch. The plan will consist

of initial store aisle displays both freestanding and end of the aisle. Malagos will also

advertise in media print to make sure their customers are becoming aware of Malagos

chocolates.

The diversity of promotional activities involved in the Malagos Chocolate plan will

allow for the South Korean consumers to get to know the brand in stages. It will let the

consumer have a trial and have trial brand recognition with the end of aisle display.

Then it will move to a free standing display allowing the brand to “speak for itself”. In

the retail stores, the brand will be able to compete against other top brand name

chocolates such as Hershey, Godiva, Cdbury, Ferrero Rocher, etc. In the final stage of

the marketing promotional plan, it will have print media advertisement whicj will allow

for full brand recognition and remind consumers to always in indulge chocolate cravings

with Malagos Chocolates.

 EVALUATION AND CONTROL

Monthly sales goals have been set for each and retail chain and other locations in

the South Korea that will be carryng Malagos Chocolates. The actual sales will be

compared to the target sales goal the company wishes to accomplish every month. The

information will then be compared and modified to the fluctuations in the environment

of which retail chain or other locations the company is looking at. This will determine if

the marketing plan needs to be more or less accommodating to the markets that the

Malagos is looking into.

 FUTURE PLANS

It is believed that the company is heading in the right directions in some aspects

such as their increasing in marketing as a result of a new marketing campaign.

However since they have focused so much on strengthening their core brands such as

they have stopped coming out with new chocolate or candy bars. This will affect them

in the long run as competitors such as Nestle and Mars are continually feeding

its consumers new products. Also globally they need to become a stronger presence as

they are also falling behind compared to other brands. Also expanding into the natural

and organic make would be a smart move that will help them maintain

a competitive advantage over the others

In order to have a competitive edge they must continue to expand their line as

they have been falling behind in the recent years. Their marketing plan for the recent

years has been an improvement but in order to venture forward they must branch off

into new markets. They should try to release an organic chocolate as this is a growing

market, they can make a lasting impression by making an organic or natural version.

Just like this is a trend they should keep up with trends in the industry.