Title Develop Finnish confectionery in China through the Luxury Strategy — Case: Fazer Group (Chocolate) Year 2012. Interestingly, according to past experience, normal products from Western countries can easily be sold as luxury goods or even luxury goods in China.
Background of the Thesis
Today, more than two-thirds of the Chinese chocolate market is occupied by foreign brands (China-jzqh: 2009), which shows a great advantage for foreign companies. In this light, the purpose of this study is to explore the market entry strategies of foreign chocolate companies with operating methods primarily designed for luxury goods, with the aim of providing references and practical suggestions for those who intend to enter the Chinese market.
Research Problem and the Objective of the Study
Although sold at an exorbitant price, the "foreign" label still attracts millions of Chinese to flock around them every day. To understand these questions, conclusions can be drawn to help foreign corporations and Fazer to understand Chinese customers more deeply and then understand the opportunities to enter the Chinese market with the most effective strategies.
Introduction of the Case Company
Karl Fazer Nordic Gourmet Chocolates: This branch is the rising star of Fazer's chocolate products. With a beautiful packaging design, the product series has become one of Fazer's most popular international brands.
Methodology and Methods
However, as a powerful confectionery company in Europe, Fazer is rarely found in the Eastern countries. To make it more competitive on the international stage, the interest in the East should not be ignored.
The Structure of the Thesis
Then Chapter 5 is the empirical part where the research results are integrated and analyzed with professional tools, and in the last part of the study, Chapter 6 gives practical suggestions on how to implement the strategy in four aspects; and finally, the conclusion of the study is given in Chapter 7. It's about how you behave and fulfill your own and others' wishes".
Luxury Goods
When we take an experiential approach, luxury goods are defined as items that provide additional pleasure by flattering all the senses at once." Luxury goods are said to have high income elasticity of demand: a greater luxury demand will appear when people become wealthier, and the ratio of the increase in demand would be higher than that of the increase in income.
Key Facets of Luxury
In luxury, it is excitement that must be sought at the highest level. It is undeniable that there are indeed customers who buy luxury just to look; they only choose overpriced products, but not those that match their means.
Anti-Laws of Marketing Peculiar to Luxury
The same applies to Fazer, as a chocolate brand, where the product itself does not have to be the best in quality when compared to others or how good it is for people's health. It is essential that there are many more people who are familiar with the brand than those who can afford to buy it.
Developing Brand Equity
Once dominated by buyer demand, the brand will fall into the world of the mass market. So it is important to build and preserve a dream for both the brand and the customers.
Communicating Luxury
One of the most important consequences of these events is the fact that the media will broadcast them. The figure of the brand's creator, he or she who made the brand a work and not a production: the image of this person will be found in its stores and communications.
Pricing Luxury
The first step in determining the price in luxury is to understand the competitive universe of the products, especially reaching far beyond its direct competitors. The most effective way to set it is to start at the bottom of the price legitimacy zone and then gradually increase the price, adding improvements to the offers as necessary, until a zone of equilibrium between volume and margin will be optimal for the brand. In general, the price level (not the exact one) of the brand's flagship products should be known not only by potential customers, but also by a wide fringe of the population, as wide as possible.
Distribution and the Internet Dilemma
This 'one-to-one' relationship is an integral part of the DNA and universe of luxury. The moment of purchase: The pleasure they should feel at that moment is an integral part of the luxury of the product itself. The information is usually distributed through the publicity of the brand and its products, so there is no need to have the expensive bicultural salesman in every distribution store.
Qualifying a Product as Luxury
As far as Fazer is concerned, there should be no online advertising or sales either through official website or franchisors. However, one fact that needs to be realized is that a luxury product is not a perfect product but an influencing product. And of course luxury product is a 'product' in nature, innovation of new product range is absolutely essential.
Entering Luxury and leaving it
Due to the increase in the income of the Chinese people in recent years, these two brands are not so unattainable today. The primary purpose of qualitative research is to provide a complete, detailed description of the research topic. Furthermore, the collection and analysis of data in qualitative research is always completed at the same time.
And when it comes to qualitative research, gaining a deep understanding is more valuable than a large size of the research material. The idea of introducing Fazer to China aims to make Fazer a luxury brand, that is, the price of Fazer would not be as cheap as the students or common people could afford. More than 87% of respondents have an optimistic view of Fazer chocolate products when comparing them to their favorite brands in China.
The purpose of this study is to make an ordinary product out of the ordinary.
A Cult toward Luxury
Country Facts
As economic revival as well as a greater pitch of globalization in the past few years, there would undoubtedly be a huge increase in the brand recognition. As shown in the chart, between the years sales of luxury goods boomed in developed markets as well as in emerging economies. But when the global economic downturn began to make an impact from 2008, the luxury goods market suffered a major setback.
Chocolate Market
However, although the foreign brands play a leading role in the competition in the Chinese chocolate market, the market saturation is very low at present and has a huge potential for development. When the average consumption per year reaches 1 kilogram, China will have the largest chocolate consumption in the world (Alibaba China: 2009). Regarding the key factors mentioned in this study, the only thing that Fazer has not yet achieved is brand awareness in the new market.
SWOT Analysis of Fazer
The purpose of a SWOT analysis is to identify the main internal and external factors that are essential to achieve the objective. In this chapter both the research methods and the data used are discussed. Along with the introduction of both qualitative and quantitative research methods, a comparison between them will be conducted; in addition, the validity and reliability of a study are discussed.
Research Methods: Qualitative & Quantitative
Qualitative Research Method
There, the researcher uses different data collection strategies, depending on the thrust or approach of the research. In addition, research data in qualitative research can also be secondary data, i.e. official documents, articles, pictures, etc. Compared to quantitative research, there may be fewer observations for data analysis in qualitative research.
Quantitative Research Method
The questions require a deeper understanding of the subject that you may not get with structured questions. These problems can somehow reduce the reliability of the research results, so they should be avoided when conducting a structured questionnaire. In addition, budget, time schedules, characteristics of respondents are also factors that can influence the choice of research method, so the researcher must choose the best alternative.
Qualitative VS Quantitative
For example, in a quantitative survey, changes to the survey will complicate the sequential collection of information, and mid-survey changes would distort the results and reduce reliability. Qualitative and quantitative research methods differ greatly depending on the way the research is conducted and each method has its own advantages and disadvantages, which actually vary depending on the topic the researcher wants to discuss. The most effective way of research is to use different types of research methods so that they complement each other.
Reliability and Validity
The result should not be random, meaning that the same result should be received if the same study is repeated in the same way. The target population should be carefully considered and care should be taken to represent a population to increase the validity of the study. Credibility stands for the degree of versatility and whether the research gives an exact picture of the phenomena.
Conclusion
Flow of dark creamy yet crunchy or frothy together, making a paradise in your mouth, a paradise where you have to close your eyes and take your tongue to every corner, chocolate will always calm you down, your happiness can be chocolate.
Data Collection and Analysis
The reason for choosing the Chinese students and workers as respondents is to collect attitudes towards chocolate products of Fazer as Chinese, rather than expecting them to be the primary customers when Fazer is launched in China. Knowing that they are willing to sell Fazer in China, once it starts, they would be the most vivid medium to advertise Fazer among family members and in social networks, and their words would be a reliable and effective method in comparison with official advertisements. Although they cannot afford Fazer regularly at first, they can encourage and suggest their friends who can afford it to buy; or at least, the respondents may occasionally buy them as gifts, as people are willing to spend large sums of money on gifts while reluctant to spend on themselves.
Research Findings
As mentioned at the beginning of this chapter, the respondents in this research are not the main target customers in starting Fazer's business in China. As a result, it is suggested that Fazer sells in China at a price level 300%-400% higher than the price listed in Finland. The Fazer is more affordable in Finland than in China, which comes with more competitors and an unregulated market.
Reliability and Validity of the Study
Success and Limitation of the Study
It would be nice to have ideas and opinions of people who have never bought Fazer on the topic of introducing Fazer in China; and it would be ideal to have Chinese respondents in other countries where Fazer chocolates are sold. Previous research has been done to introduce Fazer products to a new market, but the idea of introducing Fazer chocolate in China through a luxury strategy is completely new and original. The views in this study are provided from a different perspective - that of a Chinese as opposed to marketing.
Opportunity
As mentioned earlier, it is not suggested that celebrities appear in any luxury brand advertisements. In general, the principle of Fazer's ads is to use the celebrity effect first and then go back to lesser-known people. Radha Chadha, Paul Husband: 2006, The Cult of the Luxury Brand: Inside Asia's Love Affair with Luxury.
Suggestions for Fazer when Landing on China
Repackaging
The conceptual packaging can be defined as a cultural packaging, which will focus on creating fairy tales and stories and reinforces Fazer's values and beliefs. Similar to stories and narratives, values and beliefs are two other important conceptual aspects to tell the public. Values and beliefs should be emphasized in an understated but clear way throughout the company's culture.
Advertising
But after a period of sales, it is necessary to redesign the packages, for example, more attractive or related to Chinese elements. A personal suggestion for Fazer is to invite the protagonists of the popular American TV game 'Gossip Girl' - Chuck and Blair - to endorse their chocolate products, as these two people are known as the top celebrities in the Upper East Side from New York. ; both their social status and their love story in the play will best suit Fazer's spirit and image. Once high recognition is achieved in China through celebrities, it can follow the rules of luxury brand advertisements that ordinary people use to give Fazer customers more private space and make them feel exclusive and no-follow.
Promotion
All these are Fazer specialties which can be a bonus point for Fazer, when combined with Finnish elements like Santa Claus, polar lights, Angry Bird etc., Fazer is sure to be a strong player in the East distant. Competition is extremely high in the Chinese market, and most companies still focus on price wars. I often buy Fazer's chocolate products and try to taste all the flavors of its products.
Developing
