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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 company’s 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 Colonel’s Choice” and although initial sales
were very high, they later remained static. Attempts to export other products weren’t 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 Colonel’s Choice” as other brands are price-sensitive and their
prices can’t 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 company’s 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 they’d 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
isn’t a long-term one so they should consider renewing it very carefully.
In order for Darlings to revitalize their export strategy, I’d 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

company’s competitiveness and to stimulate an increase in demand for their goods. Overall. It’s time to do something now until it is not too late. Maybe it’s 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. 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 they’ve 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. . I believe that if Darlings don’t change anything about their export strategy.

that is why it’s essential for the company not to leave this key market but to do everything in its power to flourish there. India is one of the oldest export markets of this company. their price would be lower than that of boxed chocolates. their offer. To my mind. and they will probably be selling very well. they’d have to export these bars in very high volume in order to cover the transportation costs. and it has a special connection with Darlings since Colonel Darling served in India for quite some time. some even transfer to Darlings’ competitors) and this makes long-term planning almost impossible. This is why the company doesn’t have a central strategy and levels of advertising expenditure and promotional support vary greatly from country to country. 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. Darlings also have an agency agreement in Germany which was quite a success for the past years. These agents only sign an annual agreement and not all of them renew these contracts (moreover. with the introduction of chocolate biscuit bars. The company is only willing to prolong the contract with Darlings. Mehrota Import. Darlings are facing some problems with their Indian agent. its pros and cons. and that’s why it’d be more accessible to the customers since in general the population’s spending power in India isn’t very high. if they find a way to stimulate the demand for their boxed chocolates. chocolate biscuit bars) on this market. What would you offer to improve the situation? Darlings established an agency system which is based on individual autonomous agents in each country. 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. it is necessary for Darlings to conduct market research and consider selling other products (for example. In order for Darlings not to experience great financial losses. Should Darlings accept this offer? Why or why not? . 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. Speak about Deutsche Einfuhr. Obviously. Chocolate biscuit bars production will help to reduce the costs (as less cocoa which is very expensive will be needed for manufacturing).Characterize Darlings’ agency system and the problems associated with it. Nevertheless.

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