This Report Is Mainly to Analyze Haagen-Dazs’ Recent Innovation That Benefits Its Sales.

Assessment 3: Written Report

Subject Module: MNGT1002

Course Coordinator: Dr David
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Innovation:

 Haagen-Dazs

Student Name: VincentC

Submission Date: 16/11/2018

Word Count: 2381

EXECUTIVE SUMMARY

This report is mainly to analyze Haagen-Dazs’ recent innovation that benefits its sales. The method is researching its innovation, finding its value proposition, doing its recommendations for future, understanding its business model and seeking its value capture. Based on the innovation, it is clear to analyze its market target. Also the comparison towards its competitors can be presented. And there are some approaches for enhancing its value proposition. Similarly, its future innovation can be recommended. For more developments, it should be showed the internal or external capability and knowledge. And the business model for how the company runs is to be built. Finally its value capture can be seen.

CONTENT

1. INTRODUCTION        - 4 -

2. FINDINGS AND ANALYSIS        - 5 -

2.1 Description of Innovation:        - 5 -

2.2 Value Proposition:        - 5 -

2.2.1 Market Target:        - 5 -

2.2.2 Competitors:        - 6 -

2.3 Proposal to Enhance the Value Proposition:        - 6 -

2.4 Recommendations for Future Innovation:        - 7 -

2.5 Knowledge and Capability Development:        - 8 -

2.6 Business Model:        - 9 -

2.7 Value Capture:        - 10 -

2.7.1 Supply:        - 10 -

2.7.2 Revenue Streams:        - 11 -

3. CONCLUSION        - 11 -

4. REFERENCE LIST        - 12 -

1. INTRODUCTION

Haagen-Dazs is a global ice cream brand founded in 1921 by Reuben Mattus in New York. (NOSOWITZ, 2017) Haagen-Dazs does not contain any preservatives, artificial flavors, stabilizers and pigments. It is made from pure natural materials. The choice of skim milk combines deliciousness and health. The New York Times magazine has given the name "Rolls Royce in Ice Cream". ("General Mills China", n.d.) Haagen-Dazs has won recognition and welcome from high-end consumers in the mature ice cream market, and its “luxury” marketing method has become a classic case in the industry. While providing ice cream, Haagen-Dazs quite focused on creating an atmosphere that makes tasting the ice cream an unforgettable experience. Its advertising word "If you love her, take her to Haagen-Dazs." is widely known. (China, 2015)

However, Haagen-Dazs' consistent high-end positioning makes consumers feel too stuffy, lacking fun, modern and vitality, although classic. Many young people think Haagen-Dazs is only for older people now. So the innovation is that Haagen-Dazs reimagines its brand to stay relevant for a millennial audience (young people). Millennials' understanding about luxury is not an exact thing, but an experience, a feeling. Just like they would prefer travel, drink wines and eat snacks rather than buying a house as the older generation did. (Horn, 2016)

One of the most significant consumer preferences of Millennials is the emphasis on personalization. This has led to a sharp decline in the popularity of the line products, and the items known as "handmade" and "personalized" have been favored. Studies have shown that Millennials pay more attention to the experience of consumption and are willing to pay for good service. This not only means getting a superior experience in a single shopping process, but more importantly, resonating with the brand. It is better to creat a brand story that can deeply move people. The brand not only represents a product, but also represents a life attitude, which makes it easier to get recognition from millennials.

2. FINDINGS AND ANALYSIS

2.1 Description of Innovation:

To regain the favor of young people, Haagen-Dazs used many methods such as re-designing the outer packages making them colorful and bright, adding media advertisement (Facebook and Instagram). (Rogers, 2018)

Manchester-based design company Love Creative created new brand images for Haagen-Dazs, including the logo color changed from gold, black and white to the current purple. The rebranding also includes new packaging designs with more than a dozen emerging artists from around the world. There are 13 different commissioned artists including Santtu Mustonen and Kustaa Saksi. (Dua, 2017)

Haagen-Dazs realized that it was important to establish connections with people via one-to-one social strategies. Actually, it used to focus on mass communications only. According to Jennifer Jorgensen, vice-president and global brand director of Haagen-Dazs, she explained that when she did research on Haagen-Dazs in 2014, it was almost 100% advertising via TV. So it was necessary to come alive on social and mobile if it was to transition from a mid-40s consumer to a 25- to 35-year-old demographic.

The rebrand of Haagen-Dazs changes target market for ice-cream from older people to younger people. So this innovation belongs to the Position mapped onto the 4Ps model. And it is an Incremental innovation. Because Haagen-Dazs still makes the ice-cream, but do it better by changing the target market.

2.2 Value Proposition:

Value proposition is the most important part of corporate integrated marketing. It tells consumers why they should choose a company’s product rather than its competitors’, and clearly show the benefits of your product or service to consumers.

2.2.1 Market Target:

From Haagen-Dazs’s advertising word "If you love her, take her to Haagen-Dazs.", it is known that its value proposition is about love and enjoy. It creates a comfortable and unforgettable atmosphere to attract customers especially couples enjoying delicious ice-creams together. Haagen-Dazs offers its super-premium ice cream at an unprecedented high price. Compared to other ice cream, it is extravagant. But compared to other luxury products, it is cheap. With careful site selection and decoration, the enjoyment of "Haagen-Dazs Moment" for consumers is worthwhile.

Since the high price, Haagen-Dazs focused on economically independent adults who can spend more money on luxury ice cream from the beginning. Another market target is the health-conscious people who likes the natural ingredients instead of artificial flavors. These two market targets both has smaller market potential but higher profits.

2.2.2 Competitors:

Haagen-Dazs’s competitor -- Ben＆Jerry's, it is evolving in a hippy ideal

about fun and eco-friendly environment -- the background of its ice-cream box is a simple image of grass and cows. And its price is lower than Haagen-Dazs. Comparing with Ben＆Jerry's, Haagen-Dazs is easier to attract luxury customers, but harder to attract people who prefer cheaper ice creams. (AUBOURG, 2013)

The innovation about re-designing packages does not destroy Haagen-Dazs’s classic, but apply this aesthetic in a modern way. This makes Haagen-Dazs’s packages look much attractive than Ben＆Jerry's in younger people’s eyes.

The innovation about adding media advertisements also makes Haagen-Dazs achieve growth of sales. Haagen-Dazs ’s another competitor Halo Top is a 100% digital-native brand, and its growth was remarkable, but people did not give up Haagen-Dazs when they sometimes choose Halo Top, since Haagen-Dazs has the classic that Halo Top does not have. (Van Hare, 2017)

2.3 Proposal to Enhance the Value Proposition:

Now the previous competitions are not serious threats. But they may become another threat in the future, since the younger generation’s aesthetic may be changeable. Then the design of the packages will have to be changed again. And the

There are also some other methods that can keep similar effect with the innovation effect:

 The first method is to create messaging that speaks to specific audiences directly. For example, make a feedback wall and let buyers tell what styles he wants, combine the preferences and can do better to attract new customers. (Panozzo, 2018)

The second, millennials in different location have different tastes, such as Asians may choose Green Tea flavored ice cream, and the French may like Caramel flavored ice cream. (Luttner, 2017) So Haagen-Dazs can keep the value proposition by advertising differently relating to the local culture and tastes.

The third, Haagen-Dazs has promised that they will not use vanilla which is made through synthetic biology, a new set of “extreme” genetic engineering techniques. ("Hgen-Dazs says no to synbio • Friends of the Earth", n.d.) This commitment guarantees the worthy trust. So if Haagen-Dazs always maintain this attitude and keep this classic, then they will not lose the core customers even though they are now trying to pay more attention to attracting the younger customers.