Report on the Uk Chocolate Industry

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Report of the UK chocolate industry

CONTENTS
Introduction.......................................................................................3 Findings.............................................................................................4 •Social Factors............................................................................................5 •Technological Factors................................................................................7 •Political/Legal Factors................................................................................9 •Economical Factors...................................................................................11 Conclusion.......................................................................................13 Reference List..................................................................................14 Appendix 1.......................................................................................17 Appendix 2.......................................................................................18 Appendix 3.......................................................................................19 Appendix 4.......................................................................................20 Appendix 5.......................................................................................21 Group Meeting Minutes..................................................................22

Introduction
‘’As part of their normal production activity, businesses are involved in buying (inputs- like labour and raw materials) and selling (outputs- the finished product). Buying and selling takes place in markets and although there are different types of markets the basic analysis remains the same.’’ Britton, C (1994) p.253.

This report will identify and explain how Social, Technological, Political/Legal and Economical factors affect one particular sector of the UK confectionary market, namely chocolate. It will focus on the years between 1990 and 2009 and will show how the various factors affect supply and demand in this market. The general rule is that if the price of a product goes up, the demand goes down and when the price goes up, supply will also go up. The chocolate market is the exception to this rule as chocolate is an elastic product. If demand is elastic, the chocolate manufacturers would be unlikely to increase demand as this could lead to a fall in revenue. Instead they try advertising to increase brand loyalty in an attempt make demand more inelastic. An example of this is the recent Cadburys adverts. In order to explain how the chocolate market has been affected by the above factors, it is necessary to compare data covering the period in question and discuss the reasons for their impact on the market.

Findings
The UK chocolate market is dominated by three large multinational firms. Cadburys, Nestle and Mars. (www.keynote.co.uk) 2008 (see appendix 4) In 1998 the retail sales value of chocolate was £3,971.4bn. Sales steadily increased and currently stand at £5,258.7bn. As seen in the graph in appendix 1, during this period, sales dropped dramatically in 2001 and took until 2004 to recover. (www.euromonitor.com) 2009 The graph in appendix 2 shows that the age of the UK population is changing. ‘’over the last 25 years, the percentage of the population aged 16 and under decreased from 21% to 19%.’’ (www.statistics.gov.uk) 2009 It is said that the younger majority of the population are the consumers of chocolate. A survey carried out by the National Opinion Poll shows that the consumption of chocolate bars by young people, aged 7-16 years has fallen from 44% to 37% from 1999 to 2003. (www.mintel.co.uk) 2009

The information we will be analysing in each of the factors are as follows: Social FactorsTechnological Factors
Attitude and behaviour
Media views
Demographics
Consumer buying patternsCost of technology
Efficiency
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