The purpose of this report is to analyse and discuss how 2 consumer behaviour theories are applied in the Chinese chocolate market as well as how it differs from the Australian market. This paper discuss the chocolate industry of the most populous country of the world based on Market Segmentation and Maslow’s Theory, moreover presents how the Asian country is a potential market for Australian exporters.
Chocolate history in China
The Chinese taste for chocolate is relatively new if compared to the age of the country, the brown sweet was first introduced in the 80s (Allen 2011) from American and European companies. The product was considered exotic and prestigious, a luxury item because was imported resulting in most of the purchases to be given as a gift rather than self-consumption (Allen 2011).
The belief of Yin and Yang, being Yin for “cool” and Yang for “hot” played a significant role at consumers’ consumption in the late 90’s. Allen says that customers did not have habit of consuming yang products (hot) in summer months to maintain the body balance. As chocolate is considered a yang item, chocolate companies faced low sales in warm months.
Another issue faced by first movers was logistic, due to poor infrastructure of the country international manufactures faced difficulties since the arrival at the port until the final destination, consumers (Allen 2011). The product requires transportation and storage under specific temperatures (0C ~ 16C) however at that period China did not have well equipped warehouse, chilled trucks moreover majority of the points of sale were open-air market with live stock, creating unsuitable condition for the sweet treat (Shanghai Daily 2008) (Allen 2011).
Today China’s infrastructure has dramatically changed in many large cities such as Beijing, Shanghai and Guangdong facilitating population’s access to the product. Although chocolate consumption has increased in the Asian country - 10 to 15 per cent in a year it is still very low about 100g per person annually compared to 5kg in Australia and 10kg in Europe (Shanghai Daily 2008) (McInerney 2012). The low consumption, growing economy and expanding infrastructure combined with study of consumer behaviour theories give excellent market characteristics that can be explored by Australian exporters.
Market segmentation is a key aspect of consumer behaviour theory and is paramount in understanding the specific portions of the target population to which potential marketing campaigns could be aimed at. It is very important for an organisation to know and understand the compositional breakdown of their target markets in aiming to accomplish their particular goals. It helps to analyse the advantages and disadvantages of targeting certain segmentations, and aids in implement strategies to solve foreseeable problems and turn the disadvantages into prospective advantages.
Geographic segmentation refers to separating different markets within a population by categorising consumers by their geographical residencies. Historically, geographical segmentation is one of the most effective methods of dividing a market (Haley 1968). Because China is such a geographically large country, it would be unrealistic to attempt to sell a new product such as Tim-Tam’s through every city in China, without at least running some diagnostics to determine whether consumers react well to the good.
There will be two major considerations: Climate & Profitability Climate: Each city has a slightly different climate, and this is a significant factor influencing storage and eating habits. The southern China cities are very hot and humid, so it is hard to keep the goods in a perfect condition, particularly when not all of them are urbanised to the extent of having adequate cooling facilities. Northern China cities are very cold and dry, and northern people like to eat sweets and hot food to...