Biscuit Industry in Australia

Biscuit Industry in Australia By (Name) Course Professor Institution Date Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc6140208 \h 3Introduction PAGEREF _Toc6140209 \h 4Macro-environmental Analysis PAGEREF _Toc6140210 \h 4Political Factors PAGEREF _Toc6140211 \h 4Economic PAGEREF _Toc6140212 \h 4Social Factors PAGEREF _Toc6140213 \h 5Technological PAGEREF _Toc6140214 \h 6Legal Aspects PAGEREF _Toc6140215 \h 6Environmental Factors PAGEREF _Toc6140216 \h 6Segmentation and Targeting PAGEREF _Toc6140217 \h 6Industry Progress PAGEREF _Toc6140218 \h 6Industry Structure PAGEREF _Toc6140219 \h 7Category Segmentation PAGEREF _Toc6140220 \h 7a)Sweet biscuits PAGEREF _Toc6140221 \h 8b)Crackers and crispbread PAGEREF _Toc6140222 \h 8c)Chocolate biscuits PAGEREF _Toc6140223 \h 8d)Flavored snacks PAGEREF _Toc6140224 \h 8e)Other PAGEREF _Toc6140225 \h 8Geographical Segmentation PAGEREF _Toc6140226 \h 9Demographic Segmentation PAGEREF _Toc6140227 \h 9Psychographics Segmentation PAGEREF _Toc6140228 \h 9Recommendations PAGEREF _Toc6140229 \h 11Conclusion PAGEREF _Toc6140230 \h 11List of References PAGEREF _Toc6140231 \h 12 Executive Summary The biscuit industry in Australia has been on the decline for the past five years. The influx of imports has adversely affected the domestic market. Moreover, consumers have increasingly become aware of the need to consume healthier foods. The macro environmental analysis demonstrates the challenges the industry has been facing. In order to reach a wide customer base, the manufacturers have segmented the market by creating products that target certain consumers. Additionally, the Australian market is highly concentrated with the top three companies accounting for more than 80% of the market. In order to improve the industry, the report makes the following two recommendations. Firstly, companies should target the young generation with healthier foods. Secondly, the manufacturers need to come up with new products to counter the competition from imports. The domestic companies need to ensure that their biscuits are healthier to reach to consumers that are health-conscious. Biscuit Industry in Australia Introduction The chosen product for this report is the biscuit industry in Australia. The industry is expected to generate a revenue of $780 million at the end of 2018 (IBISWorld, 2018). Despite the essence of this industry in the country, it has faced challenging conditions in the past five years. The report analyzes the macro environmental factors affecting the biscuit industry in Australia. Next, the report analyzes the segmentation and targeting of the industry. The report then makes recommendations on the segment of the market the industry should focus on to remain in the market. Macro-environmental Analysis Political Factors Political trends affect the biscuit industry in Australia. Australia has experienced changing regulation regarding food standards as well as marketing actions. Public health policies are demanding for healthier foods with low content of sodium and sugar (Lindberg, Nichols and Yam, 2017). The current policies push for the public to become conscious when purchasing foods. Economic The Australian biscuit industry must remain aware of the changing inflation, economic growth and income levels of the target consumers. Australia has experienced changing consumer budgets as a result of consumers becoming more conscious of costs. The biscuit companies have been forced to keep on lowering their prices in an attempt to reach more consumers. Decrease prices to avoid being phased out in the market has reduced the profitability of the industry. The manufacturers have to reduce their products to survive in the market. Moreover, there has been a rise in the cost of raw materials especially sugar and wheat. The increasing cost of raw materials has increased the cost of production. With the companies unable to pass more costs to the consumers, the biscuit companies have been forced to have relatively lower margins. The companies also need to source raw materials from sustainable suppliers. Having a sustainable source of raw materials guarantees the companies of access to lower cost materials since fluctuations in supply increase the cost of the raw materials. Social Factors The consumption of biscuits in Australia shifts based on the tastes and preferences of the consumers. There has been a focus on the healthiness of foods in the country. The move is not only pushed by the authorities, but also by the consumers as well (Newman, Howlett and Burton, 2014). There has been a rise in the consumption of organic foods due to the changing attitudes of the consumers towards the intake of healthier products in line with the initiatives from the government. Understanding consumer behavior in the biscuit industry is critical in determining the right approach to marketing. The industry has recognized the need to ensure a personal approach to reaching the clients. Consuming products has become less of a fad and more of a lifestyle choice — the younger generation in particular consumer foods that appeal to them. Hence, biscuit companies are implementing a branding makeover to appeal to the younger generation. Biscuit companies have to rely on professionals and young adults in their marketing approach. More biscuit companies are adopting new slogans that appeal to young people. Technological The Internet has enabled biscuit firms to interact directly with their consumers. The rise of social media has to facilitate communication between biscuit companies and their target consumers. Clients can interact with the companies and raise issues they have about their products. The company websites serve to provide allergy notices, calorie content and for promotional purposes. Further, e-commerce platforms in Australia have allowed companies to reach a wider client base. Clients can order biscuits online and have them delivered to at their specified location. E-commerce platforms have boosted the sales of biscuits in the country. Legal Aspects The biscuit companies have to deal with the changing nature of regulation in the country. The firms need to adhere to Australian regulation on the manufacture and handling of foods. Environmental Factors Increased attention has been directed towards having companies engaging in corporate social responsibility. Companies are expected to participate in activities that improve the welfare of the community where they operate. Moreover, there have been environmental concerns on the effect of the products towards the environment. Consumers have concerns about the effect of the packaging on the environment (Dubois, 2012). There has been more pressure on the companies to use eco-friendly options to minimize pollution to the environment. Segmentation and Targeting Indus...