A Report on the Ice Cream Market Segmentation in Hong Kong

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Table of Contents

Abstract
Introduction
Ice Cream Market Analysis
Ice Cream Market Segmentation in Hong Kong
Impact on Target Market
Positioning Strategy
Conclusion
References

Abstract

The breakdown of the ice cream market in Hong Kong is presented concisely and understandably in this report. It is possible to trace market segmentation back to Appolo Ice-Cream Company Limited, covered in-depth in this article. The company has been in operation for more than five decades since its inception in 1972. Ice-cream consumers understand how the products are marketed by their respective manufacturers and distributors. They understand how certain organizations, such as Appolo and Dairy farm international fulfil their marketing objectives through segmentation. Appolo Ice-Cream Company Limited is an example of a firm that can meet the demands of its clients in several ways by having tailor-made products that different consumers appreciate.

Introduction

Hong Kong’s thriving economy and low import tariffs make high-end drinks and foods a viable industry. Lifestyles, demographics, and concerns about food safety and quality impact culinary trends in Hong Kong. The low cost and tiny packaging of Hong Kong consumers explain why some are not brand loyal. A clean and green environment for food production and customer perception fuels competition in Hong Kong’s ice cream sector. A new product or service requires extensive market research. This report briefly overviews essential ice cream products and brands in Hong Kong, such as the Flamenco ice cream and the BlackJack Sea Salt Caramel. The split market and ice cream items competing with other commodities in Hong Kong will be better appreciated.

Ice Cream Market Analysis

Due to the reputation of ostentatiousness and excessive expense, advertising ice cream in Hong Kong is tough. Aside from its association with hot summers, some parents believed that ice cream was dangerous to children, making it difficult to sell in the winter. In Hong Kong, the negative perception of ice cream has changed. It has now been embraced as either a dessert or a snack. Children remain the core market, despite Hong Kong’s aging population. However, in Hong Kong, ice cream marketers focus on the middle-aged population, a potential luxury ice cream market (Wan & Kim, 2021). The average family’s income has risen, enabling them to purchase more expensive products and spend more time with their children.

The ice cream market saw a significant slowdown in 2020 due to the COVID-19 outbreak, with ice cream shops, cafés, and all-you-can-eat restaurants closing their doors. Aside from that, the decision to close schools negatively influenced the sales of water ice cream since there were few takeaway choices for ice cream and pastries during the closure period (Xu, Wang & LI, 2021). On the other hand, the shift from wholesale to retail sales served to mitigate some of the declines. Despite a slow but steady resurgence, the industry had remarkable growth by the end of 2021.

Ice Cream Market Segmentation in Hong Kong

The consumer’s behaviour and demographics have enabled the industry to thrive. The most significant demographic characteristics include customer retention, product qualities, price sensitivity, gender, age, race, and occupation. Choosing between flavours and brands is critical; people choose that which is popular rather than significant. Even though ice cream is highly valued in Hong Kong, rarely are consumers bothered by the price. Choosing the incorrect product for a specific demographic might hurt sales. Married folks would consider how many they need to share with their families. When discussing age groups, flavours are vital to consider. Unlike their younger counterparts, the elderly may choose smooth and sugar-free. Education values quality and class, while jobs value different things. A person who wants to produce ice cream enjoys a well-branded product.

When it is too hot outside, many people choose to forego going out for ice cream. As a result, distribution is vital to market segmentation since it is the only means producers may place items in the hands of buyers in the first instance. To ensure that the most significant number of people may enjoy ice cream, Hong Kong boasts approximately 700 ice cream parlours. These types of establishments are most frequently seen in supermarkets and chain businesses.

Marketing relies heavily on promotion mix, public relations, and advertising. When customers know a product, they are more likely to purchase it. Advertising is a method of promoting products to the public (Czinkota et al., 2021). The promotion mix lets consumers have a tangy flavour for a product before buying it. Appolo’s commercials are primarily focused on product quality and relevance. Presentations on the counter, effective brand strategy, and media advertisements have helped raise awareness of its superior ice cream brands like the Blackjack sea salt caramel, which has increased demand from high- and middle-income consumers alike.

Impact on Target Market

Appolo Ice-Cream Company Limited has invested heavily in the distribution sector to ensure it can match its competitors, such as Dairy Farm International, which controls a substantial sector in the industry. To advertise its goods, it relies on market research agencies. Every company’s marketing plan should include market segmentation (Czinkota et al., 2021). To boost profits, it calls for segmenting vast target markets. Businesses can segment consumers depending on the company or customer-oriented enterprise. Appolo focuses on the market for price and distribution. Through product awareness and processing quality brands, it hopes to gain a foothold in the industry and continue to expand its market share.

Positioning Strategy

The marketing mix technique used by Appolo has contributed to its success in the industry. A high-quality ice cream product, such as the Flamenco Swirl, targets senior clientele with a lot of spending power interested in the product’s nutritional component. As a quality signal for this population, the product package has a modern and fresh appearance. On the other hand, ice cream moon cake is aimed at price-conscious and traditional consumers, focusing on children and homemakers. There are ice cream cones for kids, novelty goods, fun sticks, handhold bars for middle- and upper-class people, and family packs for stay-at-home parents. Pricing points for different commodities and market segments are an essential marketing strategy in this company. Appolo is, therefore, a well-known brand due to its products that have smooth flavour, pleasant aroma, and high quality. It will appeal to affluent people who respect high standards and price-conscious consumers. In other words, they have tailor-made products for all varieties of consumers.

Appolo’s brand is widely available in Hong Kong supermarkets and convenience stores. In response to the company’s choice to make its product more accessible, its market share has risen significantly. Their efforts serve to maintain a positive public image for the brand. Consumers’ understanding of high-end ice cream products was lacking in 1990 marketing research by a marketing agency. As a result, the price-conscious buyers do not bother about the benefits of premium products such as those found in Mango Nata De Coco Cone ice cream. Therefore, Appolo’s marketing team must strive to have products that take care of all the consumers’ needs, irrespective of their spending patterns.

Conclusion

It is evident from the research that those large sales may be achieved regardless of the brand when a firm implements the proper marketing methods. However, as the industry becomes segmented, even middle-class consumers begin seeing ice cream as a necessity, although from a different point of view. The most crucial aspect of the marketing mix is the requirement to fulfil and meet the needs of consumers. According to this paper’s findings, brand awareness is critical to marketing, and any distinction in promotional tools significantly impacts customer purchase decisions.

References

Czinkota, M. R., Kotabe, M., Vrontis, D., & Shams, S. M. (2021). Product and Service Decisions. In Marketing Management (pp. 341-397). Springer, Cham.

Wan, Y. K. P., & Kim, S. S. (2021). Intracultural differences in dining behaviour and preferences among Hong Kong and Taiwan tourists. International Journal of Culture, Tourism and Hospitality Research.

Xu, J., Wang, J., & Li, C. (2021). Impact of Consumer Health Awareness on Dairy Product Purchase Behavior during the COVID-19 Pandemic. Sustainability, 14(1), 314.

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