BMKT 161 Environmental Analysis Project: Rocky Chocolate Mountain Factory
Chris Critchley & Jiayi Xiao
Introduction & Description:
Rocky Mountain Chocolate Factory (RMCF) was established in 1981 by Frank Crail.Frank began
this to build this potential globally recognized chocolate store in Durango, Colorado. RMCF started
franchising in 1982. Today there is "219 locations in the USA , 56 locations in Canada and 11 locations
internationally"(1). And in 1985, RMCF decided to go public and go on the NASDAQ stock exchange. The
company has a wide range of premium chocolates. An approximate 300 chocolate candies. "The market
cap today is $75M."(5)
Demographic factors:
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The customers that are willing to buy and eat chocolate are most likely from 12-49years old. They
represented 59.9% of the total population. There are a large amount of potential customers towards
RMCF.
 Around 1,162,900 foreign-born people arrived in Canada between 2006 and 2011. These recent
immigrants made up 17.2% of the total foreign-born population and 3.5% of the total population in
Canada. It can be a threat or an opportunity, some of the immigrants don’t know the RMCF but they
are familiar with other chocolate brand that operate all over the world like Nestlé. The might lose
the large percentage of immigrants. RMCP also can promote or advertise to the immigrants to
increase their potential customers.
 According to the Population and Homes Dashboard, the forecast growth of global figure is increasing
in a rate of 1.9% from 2012-2017. The world market growth indicates the future opportunities for
marketing seeking to expand into foreign markets.
Socio-cultural factors:
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59% of Canadians aged 12+ can be classified as social media networker (approximately 13
million Canadians ). Almost nine out of ten teenager fit the category as do 77% of the 18-24’s,
and 72% of the 25-34’s. Online platforms is one of the convenience ways to communicated to
their customers. Rocky Mountain Factory can use this trend for better development towards
generation Y and generation Z. Through the online platform, they can do some ads, promotions,
customer services and so on.
Chocolate expected to be boosted by an increased interest in “healthier” varieties, such as dark
chocolate, supported by innovative packaging and marketing. Research indicates Dark chocolate
has health benefits (reducing the risk of dementia, diabetes, heart attacks, and strokes. Also
research shows Dark chocolate can decrease blood pressure, lower cholesterol, and improve
sugar metabolism. Nowadays people are more concern about their health more than the taste
of the food. They are more likely to buy a snacks that would not harm to their body and tasty.
Dark chocolate can make this happen.
 Chocolate’s popularity just keeps on growing, the poll found that more than 90% of Canadian's
want more chocolate. Chocolate is characterized by low consumer involvement and RMCF have
a number of consumer following. Once Canadian's wants more chocolate, the first brand come
up with their mind will be RMCF.
Competitive factors:
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RMCF has several competitive companies to deal with. Companies include are Cadbury,
Hershey, Mars,Lindt, Godiva, and See's .
RMCF is a gourmet niche market, there similar and strongest competition would be Purdy's
chocolates.
There is similar product from there from how they are a high end chocolate store with a similar
range of chocolate. The price is also similar from looking at a simple assortment of chocolate of
265g. RMCF will sell that for $17, while Purdy's sells it for $18.
As for place, the locations of Purdy's chocolates on the north shore has three retail locations.
One at Lynn Valley mall, one at Capilano mall, and one a Park Royal. Mean while there is two
locations for Rocky Mountain chocolate. One at Edgemont village, and one at Park Royal.
As for promotion, both websites display there chocolate similarly.
Technological factors:
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RMCF Introduced a point of sale system . The point of sale system lets employees "easy access
to sales data and identifies inventory trends."(3)
RMCF also introduced the advanced planning and scheduling software system. This program
"allocates the correct amount of raw materials to precisely meet demand."(3)
Retail shopping is most common with consumers.
Online shopping is a growing area in today's world.
Economic factors:
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Confectionery value sales CAGR, 2012 to 2017 (local currency) +3.10%. Confectionery volume sales
CAGR, 2012 to 2017 +0.49%.
Confectionery sales are expected to increase more in a period of 5 years. But customers are more
concern about the value than the volume.
The Canadian confectionary market grew by 1.3% in 2010 to reach a value of $2632.3 million
In 2015, the Canadian confectionary market is forecast to have a value of $2858.5 million , an
increase of 8.6% since 2010. Is an opportunity for all of the confectionary to growth, not just for
survival. RMCF can use this opportunity to growth.
Canada GDP and CPI are both experience a minor growth during 2006-2010. It generates a Better
forecast for consumer buying products.
Canada inflation witness a slight sinking between 2006 and 2010. Economic recovery leads to an
increase in consumer’s discretionary income increasing the consumer’s ability to purchase
unnecessary goods like chocolate.
 Unstable economic conditions in Canada and all over the world are in a recession cycle but there are
signs for Canada’s economy are recovering from recession and soon will increase the ability of
customer’s spending.
 Median after-tax income for families of two or more people was $68,000 in 2011, virtually
unchanged from 2010. This was the fourth consecutive year without significant change in after-tax
income. The personal economy did not contribute or restrain the ability of consumption.
 Majority of the above statistic are tend to believe the confectionary market will grow and more
consumer will expand their money on it. It’s overall a positive trend as economy to RMCF.
Regulatory factors:
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Because of the ingredients used in the confectionary business the overall product is not healthy.
From this big movement to focus on a healthy lifestyle and all the organic foods, there
potentially could have regulations and certain ingredients.
If there is a push to more organic treats, the price will go up because of the high quality
ingredients that will have to be used.
Conclusion & Summary:
From the areas of the marketing environmental scan, there is some areas of concern for RMCF.
However, because of the footprint they have in the confectionary industry, it seems likely to predict the
continual growth for years to come. Of course as long as they adapt to certain changes impacting the
business such as generations, and the demographic, socio-cultural, competitive, technological,
economic, and regulatory conditions.
Bibliography:
1. (2013) Rocky Mountain Chocolate Factory. Retrieved September 19, 2013.
http://www.entrepreneur.com/franchises/rockymountainchocolatefactory/282762-0.html
2. (2013) Rocky Mountain Chocolate Factory. Retrieved September 19, 2013.
http://www.rockychoc.com/about-us/
3. (2013) Rocky Mountain Chocolate Factory. Retrieved September 19, 2013.
http://www.wikinvest.com/stock/Rocky_Mountain_Chocolate_Factory_(RMCF)
4. (2013) Rocky Mountain Chocolate Factory. Retrieved September 19, 2013.
http://rockymountainchocolatefactory.com/rmcf/Documents/WebHelpingFiles/aboutUs.html
5. (2013) Rocky Mountain Chocolate Factory Inc. Retrieved September 19, 2013.
http://www.marketwatch.com/investing/stock/rmcf
6. Confectionary Industry Profile: Canada . Nov2011, P1-42. Database: Business Source Complete
7. Patwardhan, Manoj; Flora, Preeti; Gupta, Amit. IUP Journal of Marketing Management, Feb2010,
Vol. 9 Issue 1/2 P55-72. Database: Business Source Complete.
8. Chain Drug Review. 9/26/2011, Vol.33 Issue 16, P29-29. Database: Business Source Complete
9. National Household Survey in Brief series "Education and occupation of high-income Canadians"
and "Persons living in low-income neighbourhoods." Income Composition in Canada. Database:
Statistic Canada.
10. Perl, Mysql, VBA, DHTML, Javascript, CSS, on LAMThe PMB survey Database :Print Measurement
Bureau (PMB) Category Reports.