Describe Darlings export policy, their export markets and the range of exported products.

Would you characterize it as successful or not? What conclusions, forecasts, and

recommendations would you make?
Darlings started exporting after the WWII setting up ad hoc agency agreements in some countries
throughout the world. Initially, India, Australia and Latin America were their strongest export markets.
In the mid-sixties they penetrated the European market and established agencies in Germany, France,
Belgium, Holland and Italy. After Britain entered the EEC, the companys export trade to Europe has
grown considerably while their export to non-European countries stagnated or declined due to
transportation costs and difficulties in coordination and communication.
In the early 50s, when Darlings first started exporting to Latin America their two main markets were
Brazil and Argentina. They also tried to penetrate the Chilean market, but this attempt was
unsuccessful. The only product they exported was The Colonels Choice and although initial sales
were very high, they later remained static. Attempts to export other products werent successful.
Overall, the sales have been declining for over a decade and in 1982 sales in Argentina dropped
drastically due to the Falklands crisis.
Today, Darlings still only export The Colonels Choice as other brands are price-sensitive and their
prices cant be increased to cover the expenses of transportation. The only way to export other brands
is to export them in large quantities.
Overall, the export sales for the past year dropped due to the decline in Darlings price competitiveness
cause by external factors: strengthening of the sterling exchange rate, the increase in the cost of raw
materials, high transportation costs and the rivals aggressive marketing.
In general, the main problems of Darlings export strategy are high transport costs, poor selling and
forwarding agents (the latter failed to deliver complete order to Brazil for the 2 nd year in a row). These
problems are rather serious, as they directly affect the companys sales and reputation on the overseas
markets, so it is essential that Darlings deal with these issues. The problems with forwarding agents
have already resulted in tension in Darlings relationship with their Brazilian partners as theyd be
considering their position very carefully when the time to renew the contract comes. Of course, the
company is bound by the agreement signed with the freight forwarder, but most likely this agreement
isnt a long-term one so they should consider renewing it very carefully.
In order for Darlings to revitalize their export strategy, Id some other suggest several steps to take
apart from hiring another freight forwarder. First of all, they should carry out thorough market research
in order to analyze the market conditions and then to develop a marketing and selling strategy together
with their selling agents, consider penetrating new markets or widening the range the goods exported
to some of the overseas markets. They also might want to analyze their competition more carefully and
implement some changes into their marketing strategy so as to become more competitive.
Darlings management should bear in mind that entering new markets or exporting new products
(which may be less expensive to manufacture) in high volume may become a way to increase the

companys competitiveness and to stimulate an increase in demand for their goods. Maybe its also
high time for Darlings to sign some long-term agreements with their best and most experienced selling
agents in order to develop a long-term strategy of collaboration with them.
Overall, I believe that if Darlings dont change anything about their export strategy, they will risk
losing their positions on key markets which will result in great financial losses as well as a damaged
reputation. Darlings have much potential considering the number of the markets theyve entered so
their job is to work on their product range and think of expansion as well as to review their agency
system in order to survive on the overseas markets. Its time to do something now until it is not too
late.

Characterize Darlings agency system and the problems associated with it. What would you
offer to improve the situation?

Darlings established an agency system which is based on individual autonomous agents in each
country. This is why the company doesnt have a central strategy and levels of advertising expenditure
and promotional support vary greatly from country to country. These agents only sign an annual
agreement and not all of them renew these contracts (moreover, some even transfer to Darlings
competitors) and this makes long-term planning almost impossible.
Darlings are facing some problems with their Indian agent, Mehrota Import, which is reluctant to
renew the agreement despite many years of successful collaboration due to the decreasing demand and
therefore the declining sales of Darlings products. The company is only willing to prolong the contract
with Darlings, if they find a way to stimulate the demand for their boxed chocolates.
India is one of the oldest export markets of this company, and it has a special connection with
Darlings since Colonel Darling served in India for quite some time, that is why its essential for the
company not to leave this key market but to do everything in its power to flourish there. To my mind,
it is necessary for Darlings to conduct market research and consider selling other products (for
example, chocolate biscuit bars) on this market. Chocolate biscuit bars production will help to reduce
the costs (as less cocoa which is very expensive will be needed for manufacturing), and they will
probably be selling very well. Obviously, their price would be lower than that of boxed chocolates, and
thats why itd be more accessible to the customers since in general the populations spending power in
India isnt very high. Nevertheless, with the introduction of chocolate biscuit bars, Darlings would be
able to stimulate the demand as more people would be able to buy their products but at the same time
their established reputation of a luxury confectionary manufacturer will prevent them from going
downmarket. In order for Darlings not to experience great financial losses, theyd have to export these
bars in very high volume in order to cover the transportation costs. Still, with this solution Mehrota
Import will be able to renew their contract and continue fulfilling their duties of sales and marketing
on the Indian market.
Darlings also have an agency agreement in Germany which was quite a success for the past years.

Speak about Deutsche Einfuhr, their offer, its pros and cons. Should Darlings accept this
offer? Why or why not?

Deutshe Einfuhr has been Darlings selling agent in Germany for the last five years and this
collaboration was quite successful. Their turnover in 1983 was a 30% increase on their performance in
1982. The company has invested considerable time, energy and money in establishing Darlings boxed
chocolates on the German market. However, since the market is now saturated and its highly unlikely
that The Colonels Choice can gain extra market share, the German agent proposed to Darlings two
ways of possible expanding of their involvement.
The first way is to widen the range of products exported in Germany. Obviously, the new products
wont be selling at very competitive price which may seem to be a disadvantage, but since Darlings
have an established reputation there, it would be easy to introduce and to sell at a premium price other
chocolate bars which are so popular in the UK.
The second option is to increase Darlings presence in Europe. Deuche Einfuhr is a very experienced
selling agent which provides services for Darlings parent company, Fountain Food and is has a deep
knowledge and understanding of European markets. Nevertheless, Darlings cant accept this offer
immediately as they cant breach the existing agency agreements in other European countries.
The reply must be given in a month, so Darlings dont have much time to think.
In my opinion, first of all, Darlings should accept the second part of the offer and let an experienced
and competent selling agent guide them through other European market. In this way, theyd be able not
only to benefit from the agents expertise (which has proved by their collaboration with Fountain
Foods already and of which James Brady must be perfectly aware). Since Darlings cant breach their
existing countries, they can start their involvement with Deutche Einfuht by penetrating countries
where Darlings currently dont have any representatives. After their current contracts expire, theyd be
able to let the German agent coordinate marketing and selling strategies in other countries as well. This
way Darlings would be able to enter multiple promising markets and promote their luxurious and
popular brand The Colonels Choice there. To my mind, only after such successful expansion in
Europe it makes sense to widen the range of products for export. Having an established reputation in
Europe, exporting new products in large amounts on multiple markets would generate higher profit for
the company.