Montreaux Chocolate USA Case Study Case Study

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Positioning and Segmentation

It is vital to position and to segment the market effectively for this product launch for two reasons. One is that the company has sales targets, and the company needs to position in a category that will allow it to hit those targets. The premium chocolate business is competitive, and winning sales will not the easy (Richards, 2018). Furthermore, segmentation allows Apollo to reach the target market where it shops (Gartenstein, 2018). Consumers are not going to go out of their way to try this chocolate so Apollo needs to come to them. If the target market is older, wealthy, educated females, is Wal-Mart going to get the job done? Or should they distribute to Whole Foods? Is Costco-sized packaging consistent with the image the brand is trying to build? Does this market respond well to seasonal chocolate? The answer to these sorts of questions lies in positioning and segmentation decisions.

The total chocolate market in the US is worth roughly $18.6 billion, and Apollo hopes Montreaux can capture 0.6% share, or $111 million. It cannot position in super premium – based on both the quality of the product and the math, and in upscale premium it would need about a 25% share in order to meet its revenue targets.

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In the affordable luxury segment it would need just a 3.5% share to meet revenue targets, which is much more achievable. This segment also fits better with Apollo’s proposed distribution channels, which would take Montreaux to box stores and other places that are “everyday”. The segmentation data by distribution channel that is provided in the case is useless because it doesn’t provide data for the premium segment, just the overall. Data for the premium segment would help Apollo make a strong decision about how to get Montreaux to market (i.e. where people by premium chocolate is what matters here, not where people buy low-end chocolate).

Distribution is part of the key to succeeding in affordable luxury, because Apollo now needs to build the brand name, because the claim that Montreaux is “well-known” is irrelevant here – nobody in the US knows this name, and whatever reputation it has in Europe will not automatically carry over to the American market.

Apollo’s demographic target of females aged 45-64, college educated, married with children, high household income, concerned about health and weight, is a strong choice….....

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References

Gartenstein, D. (2018) The importance of market segmentation. Bizfluent. Retrieved September 1, 2018 from https://bizfluent.com/info-7743039-importance-market-segmentation.html

Richards, L. (2018) The importance of product positioning to the marketing plan. Houston Chronicle. Retrieved September 1, 2018 from https://smallbusiness.chron.com/importance-product-positioning-marketing-plan-24275.html

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