Tom Chocolate's Marketing Strategy: Positioning in the Chinese Market

This report delves into Tom Chocolate's positioning strategy within the Chinese market, emphasizing its aim to establish itself as a premium chocolate brand with a blend of modern and traditional values. It contrasts Tom Chocolate's positioning with competitors like Cadbury, Nestle, and Godiva, justifying the chosen strategy of targeting the high-quality chocolate segment due to increasing demand and rising per capita income in China. The analysis includes market segmentation into micro-segments based on pricing and quality, such as ultra-premium, premium, mass-premium, and mass segments, to cater to diverse consumer preferences. Furthermore, the report identifies key market trends impacting consumer behavior, including premiumization, regional champions, cultural consumption, and consumption seasonality. The research methodology suggests using primary research methods like online surveys and focus groups, along with secondary research, to understand market demands and formulate effective strategies. Desklib offers a wealth of similar documents and study resources for students.

MARKETING

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Positioning
Tom Chocolate positioning in China
In order to position Tom Chocolate in China, company needs to understand that China is a
developing nation having a very diverse society. Tom wants to position itself in the elite
group of chocolate company that offers high quality chocolates to its customers. This brand is
aiming to represent itself as a company that has both modern and traditional values while
making chocolates. Company will position itself as a company that offers pure Danish blend
in the chocolates. They want to remain as a premium brand in China also (Squicciarini and
Swinnen, 2016). It is suggested that company should position itself as a chocolate brand that
is having a wide range of premium products and must be capable of luring the taste buds of
mature people or the people having great knowledge about the taste of chocolates. This will
help them in making their place in the market different from their major competitors. Since
the demand of high quality chocolates is increasing hence it will be beneficial for the
company.
Core value of the company is not to compromise with the quality and to completely transform
itself into a company that works as per the demand of the consumers (Toms, 2018). They
want to do sustainable business. The brand image of the company is of a chocolate producer
that is serving high quality chocolate products at premium prices. In a very small amount of
time, this company has created a global brand image.
Positioning when compared with competitors
Along with the other competitors, positioning of the company seems to be on the positive
side. One of the biggest competitors of Tom Chocolate is Cadbury which has positioned itself
as a firm that offers products of medium price and medium quality. Most of the other
competitors like Ferrero and Mars seem to be following Cadbury. Nestle has positioned itself
as a country that is offering low quality chocolates at lower prices. On the other hand Godiva
has placed itself as a company that offers high quality and premium prices hence they seem to
give tough competition to the Toms Chocolate as they have bigger brand image too (Li,
Lyons and Brown, 2012).
Justification of chosen positioning strategy
It will beneficial for the company to position itself as a firm that is delivering high quality
chocolates. Since the demand of the premium chocolates has increased in China hence it acts
as an opportunity for the firm. This is further facilitated by rising per capita income in the

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country (Bliss, 2011). Apart from this, there is another fact that most of the battle in the
chocolate industry is for a place where company is providing medium quality products at
medium ranges. This type of positioning will help in creating own place in the less
competitive market segment. In future the demand for such chocolates is going to increase
hence this type of positioning is going to benefit the company in the long term (Zhu, Xu and
Jiang, 2016).
Market segmentation
Splitting foreign market into micro-segments
Foreign market can be split into smaller ‘micro-segments’. This is done in terms of different
products and the aim of the company to sell it to different types of consumers. Since there are
people from different sections of the society living in any foreign country especially like
China. This helps the company to specifically target customers with the help of customised
products. This customisation is helpful in attracting these people towards their products (Li
and Mo, 2016).
Segments using pricing and quality as tool
As Tom chocolate is aiming to serve for the premium market hence micro-segments are made
in this segment also. There are four micro segments made in this bigger segment. First is
ultra-premium where the company carters to chocolate aficionados who are willing to pay
very high amounts for totally different type of products and experience a different kind of
buying experience. It is generally for wealthy customers (Lu, 2011). Second is the premium
segment where company aims to achieve higher profits. This helps in attracting larger
numbers of people that loves affordable luxury products. The quality of the product is also
not highly compromised. Third segment is Mass-premium which aims to cater to ever-
growing middle class. These are generally value conscious people that look for affordable
quality chocolates. They demand for products of higher quality but reasonable rates. Numbers
of customers from this segment is in large numbers within China (Li, Li and Kambele, 2012).
Fourth segment is mass segment that looks for discounted private level products. There is a
huge competition in this segment as large numbers of companies are doing their business for
this segment only. This segment has low gross margins and price sensitive customers are
targeted using it.

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Market specific trend that can impact consumer behaviour in future
Some of the trends that are affecting the industry are:
 Premiumization: People are looking for luxury chocolates and hence the demand of
such chocolates is going to increase in the market.
 Regional champions: Niche market is now getting attracted towards local market
players. This is the region that International players had to optimise their pricing
according to local companies (Zhang and Kim, 2013).
 Cultural consumption: In some societies the use of chocolates are increasing
especially in the emerging country. Still the consumption increase is slow.
 Consumption seasonality: People are consuming higher amount of chocolates in some
seasons only i.e. like festive seasons. This is disturbing the demand and supply
balance of the company.
Research Method used
Among the different research methods, the use of primary research methods such as online
surveys can be beneficial. These surveys can be done using different marketing platforms and
one of the most beneficial is social media platforms. It is also beneficial for the company to
do research through focus groups. In this regards taking interviews of the suppliers and
distributors can be effective (Wang, Liu and Qi, 2014). They have a great knowledge about
the market and can be beneficial in understanding the demands of various types of products
and assists in making strategies. Apart from this secondary research can also be done with the
help of online materials that is available in the market.

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REFERENCES
Bliss, S., 2011. Bitter sweet chocolate: From ground to mouth. Geography Bulletin, 43(4),
p.20.
Li, F. and Mo, D., 2016. The burgeoning chocolate market in China. The Economics of
chocolate, p.383.
Li, G., Li, G. and Kambele, Z., 2012. Luxury fashion brand consumers in China: Perceived
value, fashion lifestyle, and willingness to pay. Journal of Business Research, 65(10),
pp.1516-1522.
Li, Z., Lyons, M. and Brown, A., 2012. China’s ‘Chocolate City’: an ethnic enclave in a
changing landscape. African Diaspora, 5(1), pp.51-72.
Lu, P.X., 2011. Elite China: luxury consumer behavior in China. John Wiley & Sons.
Squicciarini, M.P. and Swinnen, J.F. eds., 2016. The economics of chocolate. Oxford
University Press.
Toms, 2018. Chocolate. [Online] Avalable at:
https://tomsgroup.com/en/toms-products/Chocolate/. [Accessed on 27th January 2019]
Wang, P., Liu, Q. and Qi, Y., 2014. Factors influencing sustainable consumption behaviors: a
survey of the rural residents in China. Journal of Cleaner Production, 63, pp.152-165.
Zhang, B. and Kim, J.H., 2013. Luxury fashion consumption in China: Factors affecting
attitude and purchase intent. Journal of Retailing and Consumer Services, 20(1), pp.68-79.
Zhu, D., Xu, H. and Jiang, L., 2016. Behind buying: The Chinese gaze on European
commodities. Asia Pacific Journal of Tourism Research, 21(3), pp.293-311.