by Anna Townsend and Sabrina Tjang
Let’s talk about chocolate. It soothes our cravings and gives a little kick in the day. It comforts us when we are down, just like a best friend.
The truth is Australians love confectionery. Each Australian consumes on average 6.7kg annually, making confectionery the most popular snack food. Chocolate makes up for 77% of all confectionery sales in Australia in a market worth $2 billion. link
Impulse purchases account for 47% of confectionery bought, and nearly 50% of all chocolate buyers fall within the 25 – 49 year age group. Women tend to buy more chocolate than men, but in most cases they are buying for their families. It has been found that men aged 35 – 49 are the top buyers of chocolate bars and blocks, usually for personal consumption. The Australian confectionery market continues to grow, with annual volume increasing 12.5% over the past five years. link
With chocolate being widely consumed, brands would want to narrow down the nearly universal demographic to focus on specific segments. With the highly competitive market, brands would also want to differentiate themselves from others with strategic brand positioning, increasing their competitive advantage. Clever. Stepping on competitors’ feet could lead to bloodshed.
Three well-positioned chocolate brands are Lindt, Cadbury and Home Brand (Coles/ Woolworths).
These brands cater to three tiers of the chocolate market in Australia. Let’s consider their marketing strategy by using STP (Segmentation, Targeting and Positioning).
Segmentation: the dividing and grouping of markets into specific segments of customers that share similar attitudes or behaviors in brand choice. link
Home Brand chocolate uses a depth strategy and utilises psychological segmentation, providing consumers with a lower price alternative
Cadbury applies a Tailored Strategy (i.e. customising for segments) by dividing it into various segments with its various product sizes, such as: break segment, impulse segment, take-home segment and gift segment.
Cadbury has various product sizes:
- Bite size e.g. Freddo faces, Crispello bags, etc.
- Small sizes/ chocolate bars (50-60g), e.g. Twirl bar, Crunchie bar, etc.
- Block sizes (135g – 500g)
- Boxed chocolate package, e.g. Cadbury Christmas Sharing edition, favourites Mini Blocks, etc.
Targeting: selecting specific segments to enter. One would consider the product and its appeal to certain markets.
- People who are willing to pay a premium for better quality chocolates and luxurious Lindt branding, with 25 – 31 year old age bracket
- To household and non-household consumers:
– Lindt café. Targeted at consumers who enjoy café culture, ambience and service. Lindt has eight cafés in NSW and Victoria that offer different types of sweet and savoury foods and drinks
– ‘Food service’ products (a broad range of chocolates and sweets). Targeted as gifts, menu selections or everyday consumption from a large number of retail outlets.
Home brand has lower prices than Lindt and Cadbury. It targets lower-income, price sensitive or ‘smart shopper’ consumers who still want to enjoy similar products at a lower price. It has simple packaging designs, clear labelling. Their simple designs also minimise production costs.
Cadbury has many products to target specific segments that cover a broad range of consumers:
- Pre-teen products that attract children age 9-12 (e.g. Caramello and Freddo)
- Other product ranges such as Old Gold blocks, Chocolate blocks, etc. attract consumers of all ages
- Nut free products (Pascall range) for nut intolerant people
- Cadbury has products that are halal certified
- Targeting health conscious consumers with a nutritional panel of daily intake (DI) %. Cadbury packaging features a visible ‘be treatwise’ logo
Positioning: the efforts to differentiate a brand from its competitors. Effective positioning is majorly determined by successful communication and perception of the intended message.
Lindt positions themselves as a luxurious chocolate brand, proposing the promise of high quality and fine tasting chocolate. Lindt uses gold in their logo and much of their packaging. Gold is commonly associated with luxury and wealth. Giving the brand’s packaging a ‘high-class’ appeal.
Home brand chocolate positions themselves as the smart shopper’s choice, with more competitive prices compared to branded products. Home Brand provides consumers with a ‘no frills’ alternative at reasonable quality.
They primarily use purple for their trademark packaging with colour accents for different products, depending on the targeted demographic.
Why do we need to use STP to develop marketing strategy?
STP is important in strategic marketing planning because by understanding your market segmentation, who your target customers are and how you position your brand/product in the market, you can determine your 4P’s: what products you are going to sell, the pricing strategy, how and where you are going to sell your products and lastly, how you are going to promote your products.
What is your perspective of these three brands?
What do you think of these three brands’ market share in Australia? Who do you think has the largest slice of the pie? Are you one of their customers? If yes, why?