As a Chinese-Canadian, I am often appalled every time I walk into a high-end Haagen-Daz Cafe China. The luxurious decor and extensive all-dessert menus are a sharp contrast to the lonely frozen aisles they are stacked in back home.
In China, Haagen-Daz ice-cream has been shaped to ressonate the growing wealth’s desire to flaunt their income. Albeit the fact that it sells for more than triple the price in a country who previously had little diary in their diets, the Haagen-Daz brand is translatable to a high status symbol and embodies the premium western lifestyle.
None of this successful foreign expansion could have been done without the ice-cream giant’s accurate market research. Starting from analyzing the Chinese economy back in the 1990s, it was apparent to Haagen-Daz that the Chinese market was boombing after the reform and opening policy in the 1970s, and the newly affluent were looking for products that were markers of economic status. This allowed them to structure the price to reflect the notion of luxury and indulgence.
Distribution and product placing was also conducted after careful research, data mining allowed Haagen-Daz to conclude that the Chinese, unlike their counterparts in Europe who preferred to consume ice-cream at home, enjoyed the retail dining experience. In addition, it’s products were all imported from the US and Europe factories, instead of locally manufactured, reinsuring the Chinese of the brand’s premium quality.
From the words of Chris O’Leary, Head of international operations at General Mills, “It’s not an ice cream cone they’re buying; it’s an occasion.” Indeed, Haagen-Daz’s promotions in China center around the slogon “If you love her, treat her to Haagen-Daz”. It was intensive observation and survey research that made Haagen-Daz realize the subtle and reserved nature of the Chinese, which gave an oppurtunity for their products to become a cultural symbol of love.
The effective utilization of market search enabled Haagen-Daz to structure its marketing mix of price, place and promotion directly into the heart of China. Revenues were estimated at over $100 million in China in 2010, with an annualised growth rate of 21 per cent over the three previous years, a success that could not have been achieved otherwise.