2.2 Segmenting markets

Toblerone is gathering more and more admirers every day with similar traits. This fact is happening due to a very important factor called segmentation. Segmentation has helped a lot of companies select who are they targeting their products to, to which groups of people.

Toblerone has made use of this factor and it has implemented multivariable segmentation focusing on behavioristic and demographic variables. To be more specific, regarding behavioristic variables, they are making use of brand loyalty. Toblerone is one of the oldest chocolate bar companies with a rich history. Because it appeals to such a large group of people who are loyal to the brand, Toblerone is taking advantage of this. For example, in November 2016 Toblerone has changed the weight of their chocolate bars by making more space between the triangles which annoyed a lot of their fans (BBC). This change has brought at some point more attention to Toblerone than the actual elections in the United States which has brought Toblerone a lot of free exposure. If the fans weren’t so loyal to the brand, the change would have been a minor one and not so many people would care about it.

On the other hand, regarding demographic variables, Toblerone is targeting all the group ages and upper middle and upper class people. This type of segmentation has brought Toblerone a title of luxury chocolate bar, Toblerone stating that they have the aim of producing a chocolate of a high quality.

Regarding the positioning strategy, quality positioning is what Toblerone is currently using. (smallbusiness.com) Because of their patented product of the first chocolate bar that used honey and almonds and their reputation in the past, Toblerone is still striving to achieve that value. Toblerone has remained true to their original recipe and that is why it is so valued nowadays.

The basic conditions for effective segmentation are measurable in terms of purchasing power and profiles, actionable which means that it has to be able to serve and attract the segments, accessible which means that it has to be easily reached and served, substantial which relates to the product being large or profitable enough to serve and finally differential which refers to the product being distinguishable.

Looking at the basic conditions for effective segmentation it can be observed that Toblerone’s products covers all the aspects. For example, the conditions are met when a customer buys a Toblerone chocolate bar from the airport. In this way, it can be seen that the product is actionable, serves the need of the customer of having something sweet for the family or for himself, accessible because it can be picked on his way from any duty free shop at the airport, and differential due to its unique formula. On the other side, the product is substantial since it can be found almost anywhere in the world and measurable since it is known by whom is bought usually due to observing patterns in what class of people usually buy the product.

Review Questions 2.1

Week 2.1- Marketing Research

Toblerone needs to adapt and find he actual trends and behaviours of their customers. And for that, they can choose a data form one of the data collection brands.

First, The Nielsen retail panel includes continuous data about household’s purchases. Households include demographic variables, geographic variables and product ownership variables. Mondelez can buy data about the geographic variables. This will help Mondelez see if other regions are more responsive than the others and it will be able to adapt Toblerone to that specific market. (nielsen)

Another brand that deals with this matter is GFK. GFK is a brand that collects data about trends and customer behavior from all over the world.The best data that GFK could generate is the POS(Point of Sales) that can help Toblerone see where their products are sold, to what retailers, when and at what price. Again, this will help them generate a better strategy in order to sell their products more efficiently. If different regions of the world perceive Toblerone differently, like for example a luxury product, they will shift toward a cheaper one or it will have more success. This is why, a POs is needed, to see how the customers perceive the chocolate bar. (GFK)

In order to make a research for Toblerone, a questioner can be done, which will look as follows:

1.Do you like Toblerone?

__Very much

__So and So

__Not really

__Not at all

2. How many times do you buy Toblerone?

__Once a day

__2-3 times a week

__Once a week

__On special occasions

3. Where do you buy Toblerone from?

__ A local store

__ A supermarket

4. What do you like about Toblerone?

5. What you don’t like about Toblerone?

6. Rate from 1 to 5 (1 being the lowest) the following aspects.

     a.Taste_                              d.The brand__

     b. Sweetness_                    e. Packaging/ shape__

     c. Price_                              f. Ingredients/ flavours__

7.Do you prefer other brands of chocolate bars? If yes which?

8. If the answer to the question above was yes, what do you like about that specific brand? If you answered no, what points of improvement you have for Toblerone?

9.Is there anything that you feel Toblerone is lacking?

10. Do you think that the preset choices available in chocolate bars are costly? If yes, what will be an ideal price range?

11. Would you prefer to switch to chocolates of another brand if it is cheaper than your preferred brand without any change in quality and taste?

12. Do continue eating chocolates of a company if it has some controversy in market or do you lose trust?

The downside of a questioneer is that the research is made on a sample of the total population which does not represent the total population.

Bibliography

GFK. (n.d.). Retrieved from www.gfk.com: http://www.gfk.com/

nielsen. (n.d.). Retrieved from www.nielsen.com: http://www.nielsen.com/ssa/en/solutions/measurement/retail-measurement.html

Week 1.7

Using the breakdown approach I will research the GDP, GNP, inflation rate and retail sales in order to be able to give an accurate estimation of the market potential and the sales potential of Toblerone.

As seen in the picture above, the GDP of Netherlands has been through different growth rates over the years, but it has maintained nevertheless a growth with a few exception. (economics).

Above is presented a graph that shows the GNP of Netherlands across several years and has maintained a big enough growth.

In the graph above is presented the inflation rate in Netherlands which has had an unstable growth during the last years. It is predicted that in the future years it will go to a negative rate. However, in the present, Netherlands is doing much better than the several years in which they managed to keep the inflation stable but still quite high.

Finally, in the graph above can be observed the retail sales in Netherlands which are quite high except some months of the year.

Based on the data gathered, an estimation regarding Market potential and the sales potential can be done. Judging by the graphs, Netherlands has a healthy economy from which Toblerone can further profit off this thing. Sales can grow because of the healthy economy and also because of the present growth in sales in Netherlands.

Mondelez should develop a marketing plan for Toblerone because first of all, it helps them to track the milestones and the development in the Dutch market. Second of all, it will help them to define the customer target and finally, a market plan helps Toblerone to focus on what is important. For example, Toblerone may focus on trying to improve the appeal towards the younger customer group rather than all of them since the older customers are already accustom to the product.

If I were asked to make a forecast for the future years, I would choose the quantitative forecasting. The main advantage of this technique is the ability to predict changes in sales patterns and customer behavior. Another advantage of this technique is the flexibility since it allows the business to use non-numerical data sources. This is very useful when there is an ambiguity in data. Two major disadvantages that can occur using this technique are anchoring events and selective perception. (small business)

Bibliography

economics, T. (n.d.). Trade Economics. Retrieved from www.tradingeconomics.com: http://www.tradingeconomics.com/netherlands/gdp-growth

small business. (n.d.). Smallbusiness.chron.com. Retrieved from http://smallbusiness.chron.com/advantages-qualitative-forecasting-37020.html

Week 1.6      Marketing in international markets and globalization

Toblerone is an international product which managed to be exported by 1963 in 101 countries. Now, Toblerone is sold in 122 countries all over the world( Saudi Arabia, Romania, Netherlands, Australia, etc), mainly in airport’s duty-free shops. In duty-free shops, Toblerone holds a market share of 25% since the brand is always associated with trips. Also, a 2016 study made America by InfoScout shows that Toblerone is purchased by 46% of the people who are pantry stocking. The same article shows that Asians are more willing to buy the chocolate bar than the other races. (Infoscout, 2016). Another report shows that in mainland Switzerland, Toblerone holds a market share of 40% of the total chocolate bars sold. This might be deducted because of the national awareness of the brand. (Shock, 2008) . Apart from that, Toblerone also accounts for 40% of the Swiss chocolate exports out of 96% chocolate bars produced for export. (Amos)

Regarding the recent international turmoil such as the Ukraine Crisis or Isis have not made an impact yet on Toblerone, or Mondelez International. Since Toblerone is a product that is almost exclusively produced in Switzerland, Toblerone is relying mainly on exporting. Given the fact that a series of political issues have happened across the world, the company did not suffer from any of it. A research was made in this way and no reports that show a decrease in sales or market share has been found. Because of the lack of reports made by a company in this matter and no drop in sales in those countries, it is safe to judge that the recent international turmoil did not influence in any way the company.

Toblerone has had some problems in the past regarding different aspects. First, Toblerone was accused by Boycott of Cadbury over its tax avoidance. Since it was taken by Mondelez five years ago, Toblerone has not paid any UK corporation tax.  This is not due to a lack of money since last year; the company had a profit of 96.5 pounds. This caused a drop in the image of Toblerone as well as Mondelez who tried to do out of Toblerone, a tax evading company.

Secondly, the company was badly criticized for its supply chain management. In 2012, the company has had a series of incidents. The company did not respect the code of conduct which discussed a set of 10 rules. Rule number 3 refers to Treating People Fairly, but the company was accused of forced labor, child labor and discrimination. This happened mainly on the cocoa fields. Information regarding working weeks and wages were vague and not consistent along the reports. These were not consistent with the International Labor Organization’s core conventions which included 48 hours per week +12 hours overtime.  As it can be presumed, the company has severely suffered despite its efforts to recover.

Finally, in June 2015, Ethical Consumer has reported that Mondelez has sold a large range of products containing dairy that were not certified as organic. All these problems stated above has affected Mondelez’s image and it made the company change its policies and made bigger efforts in order to be able to recover from the drought. (consumer, 2015)

Bibliography

Amos, S. (n.d.). Champions of Design: Toblerone. Retrieved from www.campaign.co.uk: http://www.campaignlive.co.uk/article/1141350/champions-design-toblerone#

consumer, e. (2015, June). Ethical Consumer Toblerone. Retrieved from http://www.ethicalconsumer.org/scoredetails.aspx?ProductId=58027

Infoscout. (2016). InfoScout-Toblerone. Retrieved from http://infoscout.co/brand/toblerone/?utm_expid=75303912-6.htwCYLNcRc6Lien8_V3bYg.0&utm_referrer=https%3A%2F%2Fwww.google.nl%2F

Shock, D. (2008, March 23). 8 facts about Toblerone Chocolate. Retrieved from www.shockmd.com: http://www.shockmd.com/2008/03/23/8-facts-about-toblerone-chocolate/

1.5 Macro Environment

Because of the constant wish for expansion, Mondelez operates in over 80 countries worldwide and in certain emerging markets, they are exposed to political, economic and regulatory risks. First, some countries have a greater vulnerability to infrastructure, such as China. Or maybe there are economic problems or greater political problems.

Secondly, in the already developed markets, a set of laws might that prohibit companies and their employees from making improper payments to government officials such as FCPA or the U.K. Bribery Act. Failure to do so might result in civil and criminal penalties that can affect their reputation and financial condition. (International, 2016)

In an interview with CNBC, The Mondelez International CEO, Irene Rosenfeld, has talked about the external Macro Environment challenges that the company is facing. The main topic who was brought was about the economical part of the macro environment.  Currencies and input costs have been brought up by being volatile. The main reason for the statement is that Mondelez is doing business with one of the largest Cocoa distributors and Cocoa is a volatile input nowadays. A combination of fluctuating currencies and input costs have put pressure on Mondelez’s portfolio to take some aggressive pricing action in order to be able to cover their costs( general costs, supply chain costs, investments in Franchises). (Imbert, 2015) 
Click the link bellow if you want to see the full interview with the CEO Irene Rosenfeld.
http://video.cnbc.com/gallery/?video=3000355439

Regarding the consumption of Toblerone, there was not reported any differences in the buying behavior of any social, cultural or religious differences in Netherlands.

Bibliography                                 

Imbert, F. (2015, February 18). CNBC. Retrieved from www.cnbc.com: http://www.cnbc.com/2015/02/18/macro-environment-challenging-for-mondelez-ceo-irene-rosendeld.html

International, M. (2016, February 19). Mondelez International. Retrieved from www.mondelezinternational.com: http://ir.mondelezinternational.com/secfiling.cfm?filingID=1193125-16-469394&CIK=1103982

1.4 Buying business behavior

Toblerone is a product that appeal to customers and it is sold to them, but it is not sold directly to them. Therefore, Toblerone sells its chocolate bars to the reseller markets. For example, the supermarkets are their main buyer, which also sells the chocolates bought to customers, of course, at a higher cost than for what were bought for, but that is for another chapter.

This being the case, Toblerone has adapted to the business markets since it depends on them. Selling directly to the consumer will mean that the profit will be too low and the work very confusing. This works best for the customizable products, but Toblerone is a mass seller, since it sells large quantities to retailers.

In a buying situation, as mentioned before, Toblerone will fit in the straight rebuy process. Little to none modifications are made for the product when sold, so it is mass sold with no variation. Toblerone is not a customizable product, so a straight rebuy process is most likely to be applicable.

Usually, retailers adopt a mercantile purchasing since they buy the product for reselling. Because of that, they make a planned agreement with the firm in which a specific type of item, Toblerone chocolate bar in this case, has to be delivered at an approximate date. Between this deal, a series of activities happen. First of all, Toblerone has to inform the others about the product and its assets. Toblerone has a very detailed description of their product on the official website, which is aviable in different languages so that it can be more accessible. Toblerone also conducted a series of commercial to appeal directly to the customers and create demand. (Toblerone)

Next, the same can be considered about the product.  Toblerone was very strict to its formula which is patented and they were very faithful to it. After several years, new variations were added, but they still focused on their main recipe. That is why, before selling, Toblerone makes sure that the products are of the highest quality.Regarding Financials, Toblerone is trying to acquire profit through large sells to the retailers.

And finally, on the social status they make a very much use of their history which appeals even today to customers. Their main focus is to create demand for their product, and they managed to do so. Despite the rich history of the product, the need of appealing to a younger audience came, and they did so through making a limited edition huge Toblerone chocolate of 750 gram. This braught more media attention to them since it became popular, mainly through youtube, which is one of the most popular websites of sharing videos. Because of the attention it got, several videos appeared and it created an improved likeliness to the product. (Toblerone) (Youtube) Down below, is an example of one of the funny videos mentioned.

Because of the demand of the product grown, retailers were more interested in reselling their product, and even after the limited edition was gone, people still wanted the Toblerone.

The example gave above is also creates derived demand which translates in a bigger revenue for the company. Also, the demand increases in skilled and unskilled workers.  

Consumer Buying Behaviour

Week 1.3 Consumer buying behaviour

Toblerone is considered a luxury product and that is because it was marketed as a high quality product in the past and people still have that image in their head. Nowadays, the buying behavior influence is weak. For example, family might have an influence since they are those who buy the product for the child. This is the parent’s financial influence that makes upon the kid in choosing the product, but only in the early stages. As he grows, influence becomes weak and non-existent. This influence can be produced only in some social classes. What is it above middle class, no influence can be applied and kids chose their own product. What is influenced however is the social class influenced by the marketing of Toblerone. Since it is seen as a high quality product, it is targeted to the middle and lower-upper class. The influence is pretty moderate at that stage since they will probably go for Toblerone instead of an Albert Heijn chocolate bar, considering their social status. This type of behavior applies not only for the chocolate, but also in all aspects such as buying a more luxury car like a Bentley, instead of a low-cost Dacia that is built to take you from point A to point B.

Regarding the stages of the family cycle, Toblerone is not influenced by any stage since in all times a chocolate bar is in demand, even for the Single 2 type, which might want the chocolate bar for the Nostalgia factor. So, no matter the stage, the influence is weak. In a buying behavior of a person, the most often met situation is through the traditional shopping, and with Toblerone is usually done through Post-purchase evaluation since people usually take food not only chocolate to try and they do not do much research beforehand.

To illustrate better the attitude of the customer towards Toblerone, an attitude scale was created.  

Attribute	Importance	Brand Evaluation	Importance x brand evaluation
Taste	5	4	9
Price	4	2	6
Shape	3	4	7
Stays hunger	1	3	4
Quality	5	5	10
Level of sugar	3	1	4

1.2      Marketing strategy and understanding competitors

To understand better Toblerone we have to look at the market and see how it performs compared to the competition.  In order to do that we have to understand the mission statement of the mother company, Mondelez. Mondelez mission is to create delicious moments of joy. (Mondelez)

Being owned by a big company, means that it has a lot of competition. When looking at the competition it can be seen that it comes from different sections. For example, a main competitor regarding brand products might be Snickers because it contains almost the same elements with small variations( caramel instead of honey, peanuts instead of hazelnuts). A different kind of competitor for Toblerone might be of a generic nature, which contains small local products. For example, there is a product named Kolumbo in Croatia which has even the same shape as Toblerone. Of course, the quality is not the same but is a cheap alternative to Toblerone. Another type of competition might be of a product form nature, such as a homemade chocolate using the same ingredients.

 Considering that, Toblerone has a competitive advantage being a market challenger. Being on the market for more than 100 years, it established its name on the market. Also, the quality didn’t drop, so, it brings more and more customers. (Toblerone)Toblerone alsohas the history in its advantage and also it helps a lot being the first patent product that uses the actual ingredients. Overall, Toblerone has made an image over the years and has a huge advantage in appealing to customers than other newly entered products.

When you look at the Ansoff Matrix, the growth strategy that fits Toblerone could be Market Penetration. The product already has a good image and a rebranding might be disastrous like Coca-Cola attempt to rebrand in order to cope with Pepsi. It seems that the brand matters more for the customers than the actual product. Considering that, Toblerone can appeal to the existing customers by being in as many places as possible, which is already doing. To illustrate that, try and think of how many people come with a Toblerone chocolate bare from the airports in general and the answer will be quite a lot. That is because Toblerone is seen as a luxury chocolate bar in customer’s heads. The brand and quality maintains its position. 

 Sources:

Mondelez. (n.d.). our dream belief and values. Retrieved 09 14, 2016, from Mondelez: http://www.mondelezinternational.com/about-us/our-dream-belief-and-values

Toblerone. (n.d.). our history. Retrieved from Toblerone: http://www.toblerone.co.uk/

1.1 Introduction of the company of the product

Toblerone, everyone’s favorite triangular chocolate bar is my choice. The main reason I wanted to choose this chocolate bar is because of the memories I have with it. I can remember that every once in a while my mom used to get one to me. The chocolate was pretty expensive compared to the others at that time and money was not the biggest asset of my family, so every time I got it, it made it more special. Looking at it now, it has an air of nostalgia for me but not only for me. The chocolate bar has a rich history since it exists from 1868, making an immediate impact on public.It all started in 1968 when Jean Tobler from Switzerland decided to start its own company in Bern. In 1908, his son, has invented a new patent of chocolate bar, made with an unique shape, a triangle. The name came from the owner’s name and the Italian word Torrone which means nougat. Where the triangle shape is coming from is unknown, but one theory says that it comes from the tallest mountain in Switzerland which is also the symbol of the country. (Toblerone)
Now, Toblerone still produces its own chocolate bars in four different tastes, but the brand is owned by Mondelez International in present. Mondelez International is one of the biggest companies in the world and successfully sales products from brands like Oreo, Milka or LU. (Mondelez)

 Bibliography

Mondelez. (n.d.). Retrieved from http://www.mondelezinternational.com/

Toblerone. (n.d.). Retrieved from http://www.toblerone.co.uk/history/howitbegan/2000