Haagen Daz Case Study
Consumers do not perceive ice cream has regular part of their diet; ice cream is bought as a treat, a “reward”, either to a child, the family or to oneself. Generally a consumer does not think before buying an ice cream, it is generally bought as an impulse buy. There is a great emotional involvement and a very small objective evaluation of the problem at hand. The consumer chooses to buy and them fell the product (in this case taste) and then evaluate his decision.
This type of behavior involved in buying ice cream allows brands to exploit the emotional factor as a trigger of the purchase; Haagen Dazs is exclusive and sophisticated, Vianeta is posh, Calipo is fresh Super Maxy is cool, none of these are objective characteristics of the product, they are just emotions the brands chose to associate with their product, and these are the triggers that when consumers are in the right emotional set of mind will make them buy that ice cream over another. 2. Evaluating the Haagen Dazs marketing plan. Does it look consistent?
Haagen Dazs (HD) defines its own brand identity as “100% genuine, sensual, sophisticated adult treat”. Trough a very consistent marketing plant HD was able to convey this message the consumers, so that their image of HD is that of a high quality and expensive ice cream that is to be eaten and appreciated as a personal treat, an affordable luxury. HD was a large ice cream manufacturer from the USA that had started out in the 1960’s as a small business of a Polish immigrant, Reuben Mattus, that sold ice cream to stores on the Bronx. Mr.Mattus realized that at the time in order to be competitive in their pricing ice cream manufacturers where cutting down on the quality, so ice cream had became just cold and sweet.
Realizing this he chose to position himself on the opposite side of the market, with a high quality expensive ice cream. From there HD sales progressed, so that in the early 1990’s it was the leading brand in the US premium ice cream market, and it was being sold in Canada and Japan. In 1988 HD was acquired, with the rest of the Pillsbury Co. , by the British enterprise Grand Met.
Grand Met decided it turn HD in to a leading global ice cream brand, the objective was to reach world wide sales of $1 billion by 1995. When HD first tried to enter the European market, in the early 1990’s, the ice cream market was a stagnant market with a growth of approximately 1 to 1. 5% a year. It was dominated by large multinational conglomerates like Unilever, Mars and Nestle, that where trying to increase their market share by competing with prices, cutting down on quality. Ice cream at that time was perceived by the consumer as a treat for children.
This panorama was not that different from that one that Mr. Mattus faced in 1960’s and dictated the birth of HD. At the time Grand Met decided to launch HD in Europe, it was already present in some luxury restaurants in Paris and on the Harrods of London. Being part of a great conglomerate, the easiest way to assure sales would be to market HD in the fast-food restaurant chains of Grand Met (Burger King, Godfathers Pizza and Bennigan’s), but this strategy would be inconsistent with the brand identity, placing on the same level fast food and HD ice cream.
Following the other market competitors, by pursuing heavy advertising on television, would also send an inconsistent message because it would reach the wrong audience and weaken the “sophisticated product” status of the brand. So Grand Met devised a market strategy to convey the brands identity to the consumer, so that the consumer would be willing to pay a premium price for the premium product that is HD ice cream. The first step of this strategy was to increase the consumer’s awareness of the brand, giving them a place to sample the ice cream and create a word to mouth momentum.
HD opened innumerous ice cream parlors in the main European cities in places that had a heavy affluence of customers, these where meant to be the shop window of the brand. These ice cream parlors where design like cafes, with ample space for seating and built with natural materials. This is exactly the opposite of the regular sterile looking ice cream parlor where after buying the consumer is as to go out to eat his ice cream. This was meant to convey an image of “quality” and the message that one should seat and take his time to enjoy HD ice cream. HD also penetrated in the food services sector, in quality hotels and restaurants.
This was done always with a cobranding arrangement, i. e. HD would only sell its product to places that would present the HD brand on their menu. This had the objective of first of all of associating the image of HD quality with the image of quality of these places, second to increase the brand awareness of the exclusive clientele of these establishments. In the retail HD was present in super-markets, delicatessen shops, cinemas and convenience stores, in al these places HD ice cream was presented in a different HD owned small freezer, so to set HD aside from the other ice creams, conveying a message of exclusivity.
Also HD pursued heavy in-store sampling, giving consumers a chance to sample HD, and thus generate more word to mouth HD ice cream was a completely different ice cream from most of the products present in the European market at the time. It was an American stile dairy ice cream with high dairy fat (18% opposed to the 10% of the regular brands) and a very low overrun (only 20% when the regular brands have 80-100%). Also HD doesn’t use any chemical additives. In order to stabilize its product HD uses egg yolk.
These particular characteristics assure that HD ice cream has a distinct flavor and texture and allow the consumer to set it aside from the other ice creams, giving ground to support the idea of high quality of the brand. To reinforce its exclusivity image HD chose to market its product in a half a liter tub, instead of the regular liter tub used by the competition at the time. HD to maintain the consistency of the quality/exclusivity approach to the market, chose place its product in the upper end of the ice cream prices.
An HD tub in the UK market cost about 30 to 40% more than its competitors, and in general it costs eight to nine times more than the cheapest ice cream on the market. This pricing strategy underlines the idea that HD is a different ice cream and therefore has a different price, and is clearly another brick on the exclusivity wall HD uses to shield it self from the competition. In order to escape this “ice cream for children” status quo, HD placed itself in the upper-end of the market, super-premium ice cream, targeting young couples with disposable income.
To these HD ice cream is presented as an “affordable luxury” to consume on their own private time. HD chose to promote its ice cream only on the printed media, with a high-profile provocative campaign that had clear adult references. The advertisements where printed in regular weekend newspapers issues and on women’s magazines, all issues that would be read during periods of relaxation and leisure the same periods HD wants its consumers to eat its ice cream. HD clearly chooses a medium that their target customers pay more attention to and deliberately tries to associate it self with the relaxing period associating with reading these media.
As one can see consistency is the main word in this market plan, every step taken is in the direction of reinforcing HD image of a high quality, sophisticated and exclusive adult treat. HD could very easily have taken the easy way in to the market, selling its product in the fast food chains of Grand Met and promoting it via heavy TV advertising. But this approach would be inconsistent with the brand identity, and would probably force HD to lower its price, and on the long run to lower its product quality.
It was this very consistent and aggressive marketing strategy that allowed Grand Met to fulfill its objectives of turning HD in to a global leading ice cream brand. HD has chosen to exploit the consumer habit of buying ice cream on the impulse, as a response to some emotional stimulus, and has associated itself with the sense of exclusivity and sophistication, so that it would be a way to the target consumers, a demographic group more sensitive to these issues, of experiencing these feelings.