It can be seen that Magnum is using marketing concept to guide its business activities.
Magnum, right at its slogan “For pleasure seekers”, it can be said that Magnum is aimed to pleasure its consumers while archiving its long-term goals and profit
In 1992 with the help of extensive market research, Unilever launched different flavours of the Magnum ice-cream such as Almond, Mint and Double-Choc. Today, Magnum has a wide range of product line with hundreds of varieties such as Magnum Classic, Mayan mystica, White, Dark, Double Caramel, Mochacchino and a variety of others.
Magnum also invented a mini- bar product line (smaller bars with 150 calories), in order to cater to some people’s need of keeping diet
It has developed new technologies to improve the creaminess of ice-cream: The single screw cold extrusion technology. Besides being able to reduce the fat content of the product Using this new technology they were able to successfully launch a reduced fat (6% fat) packaged ice cream with full fat quality, claiming an 'extra creamy taste'. They also have found a way to make ice cream healthier as well as really tasty. It has all been possible thanks to a new ice cream ingredient discovered by Unilever's ice cream scientists - ‘ice structuring protein’ (ISP). This protein allows us to make ice cream which are lower in fat, sugar and calories and at the same time include more fruit. Combining ISP with stabilizer technology allows them to make products that additionally don’t melt so easily. In addition, by 2015 they aim to source 100% of the cocoa in every Magnum from RAINFOREST ALLIANCE CERTIFIEDTM farms. This increases the value of its products.
Unilever has developed strong distribution channels and maintained a close relation with retailers, specially smaller ones that are persuade to rent Unilever’s freezers and forced to sell their products. Even Magnum is a premium ice cream, it is accessible to local grocery stores and supermarkets. In most major supermarkets and 24-hour convenience stores in any countries it distributed.
At the recent launch held at URBN Bar and Kitchen, Magnum revealed its new Chocolatier Collection: with Magnum Chocolate Brownie, and Magnum Chocolate & Strawberry. With two unique new flavors Magnum is offering a more pleasurable and exciting experience to suit one’s personal preference
Unilever has an integrated marketing strategy across all of its top brands, including both online and offline media. However, Magnum was the first Unilever brand to run a search marketing campaign. As Kate Driver (Magnum Account Manager at media agency Mindshare) explains, “Unilever used Google AdWords for the first time for the launch of their new range Magnum 5 Senses in 2005. It was used in conjunction with other online and offline media.”
A taste panel of chefs and editorial staff at The Food Channel gave the bars a try, and, yes they are very, very good. The ice cream has a truly premium flavor, and the thick Belgian chocolate coating delivers an exceptional taste experience.
“Magnum ice cream bars are loved and enjoyed by ice cream aficionados internationally,” says Gina Kiroff,Brand Building Manager, Ice Cream, Unilever Canada. “Worldwide, over a billion Magnum ice cream bars are sold every year
Unilever global CEO Paul Polman has announced that the Magnum ice cream brand has become a Billion Euro Brand saying ‘Magnum is one of the greatest success stories in the history of consumer goods’. Sold in 50 countries, Magnum is Europe’s top ice cream brand. Magnum also became the number-one super-premium stick brand in the US within four months of launch, according to Nielsen
Magnum did so well in U.S. test markets in 2010 that Havelock pushed up its U.S. debut from 2012 to April 2011. Supported by a marketing budget of about $15 million, Magnum became one of Unilever’s “big bets” of 2011. Sales hit $100 million in the first year, surpassing Unilever’s forecasts by 50 percent
Costs and benefits of marketing orientation
By being market- oriented, Magnum is better able to gather information about customers and competitors, more able to analyze the information that is collected, and thus more able use the knowledge gained to guide current and future strategies. There are some crucial benefits for Magnum when applying marketing concept.
Making customers a top priority can be a big advantage in a competitive industry. When competitors put too much time and effort into product engineering and development, they are less equipped to build solutions that appease the demands of insightful customer markets. When customers are satisfied their need, company can get customer satisfaction.
When customers get satisfied, it increases customers’ retention. Because the customers now have the great attention of the company, customers receive faster responses to their needs and thus feel like they are receiving the care they deserve. This makes it much harder for competition to gain your customers’ attention and makes it much harder for the customer to entertain the competition. And finally, when customers are familiar with the company products, they will become loyals to the company. Brand loyalty alone is a distinct advantage in the market because it develops a customer base resistant to attempts from competitors to attract business. Loyal customers buy more frequently and in larger volumes. They are also less susceptible to competition and more willing to pay higher prices. All of these business benefits mean the company has much better ability to remain viable and successful as long as it retains the marketing concept.
To illustrate the success of Mugnum, according to Bloomberg Businessweek, Americans has now consumed more than 100 million Magnum bars.. The Anglo-Dutch group made the claim as it revealed that sales of Magnum broke the 1 billion euros ($1.26bn) barrier last year.
Marketing orientation also helps Magnum to create stronger strategic relationships relationship between the organization and the customer. Customers will become more involved, values become shared, strategies co-develop, and mistakes tend to promote a two-way communication on how the problem can be solved together. The intangible value that is delivered by being market-oriented allows the organization to become a partner rather than just a vendor. Then customers will be more loyal.
With continuous – updated customer feedbacks, Magnum can also make adjustments over time and will look to the market to guide product improvements and upgrades. Knowing what customers want not only helps develop products to suit, it helps Magnum better market them persuasively to grow your customer base and sales levels
It also helps Magnum drive constant improvement in company processes and systems because it promotes a "culture of experimentation." Company leaders and functional departments perpetually explore opportunities to improve upon product and service offerings to adapt to current and future needs of customers.
The noticeable success of Magnum is that almost every countries it entered, customer is attracted and keep consuming Magnum ice cream. Magnum is also even famous in countries that it has not entered like Vietnam.
A strong market orientation does come with significant costs.
The activities involved in carrying out a marketing oriented business operation are time-consuming and expensive. To effectively implement a market orientation, Magnum must invest in extensive marketing research. Research before, during and after product or service launches takes significant time and investment. Product-oriented companies are often using this time to further product research and development. Additionally, marketing oriented businesses often invest in customer care and service activities such as follow up, returns and other efforts to satisfy customer demands. Therefore, clearly defined communication channels to allow for efficient response times are required.
Technological infrastructure is also critical in the early 21st century as companies use databases to collect, analyze and use customer data. Constant modifications to work processes require investment in ongoing training. Constant product modifications also means ongoing investment in new equipment technology infrastructures
Production processes must flex to the new features customers want and marketing, and sales employees need to know what benefits to use in persuasive selling
Buyer behaviors’ effects on marketing activities in Vietnam
The central focus of marketing is the consumer. To devise good marketing plans, it is necessary to examine consumer behavioral attributes and needs, lifestyles, and purchase processes and then make proper marketing-mix decisions. Consumer differs from one to another one and arranging into age, gender, income, education level, and tastes
The behavior of the consumer with regard to purchase is affected by various factors and these factors are uncontrollable. These factors are also called the determinants of consumer buying behavior. These factors affect the consumer behavior differently
Culture is one of the important factors which affect the consumer buying behavior. Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous group of people and transmitted to the next generation. Culture also determines what is acceptable with product advertising. Culture determines what people wear, eat, reside and travel.
Viet Nam is a multi-cultural country where tradition and modernity, north and south meet in comfortable companionship. The convergence of rich and diverse cultural influences has endowed Vietnam with both a traditional and contemporary mix of food. This helps Magnum have one more opportunity to develop marketing channels compatible with customs as well as culture of the Vietnamese. Magnum can target both traditional and modern Vietnamese by introducing a balanced mix of products that satisfies both of them. The company should also remember the influences of Japanese and Chinese culture on Vietnamese; therefore, the three might share many preferences such as fruity or green tea flavours.
Magnum can also segment the market based on different occasions that consumers may choose to use the products. These different occasions can be referred to the different festivals celebrated in Vietnam; for instance, the Moon cake Festival celebrated in the month of September. In order to increase consumption of Magnumproducts, Magnum Vietnam will sell ice cream moon cakes to cater to this occasion. Other festivals such as Christmas, Mother's Day, Father's Day, and Valentine’s Day are some of the occasions, which will also work closely with the marketing strategy to boost consumption of Magnumproducts.
Vietnamese are traditionally patriotic. Therefore, they still give the priority for domestic products. 71% of Vietnamese consumers trust Vietnamese high quality products (according to FTA).
Each culture contains “sub-cultures” – groups of people with share values. Sub-cultures can include nationalities, religions, racial groups, or groups of people sharing the same geographical location. Sometimes a sub-culture will create a substantial and distinctive market segment of its own.
Magnum should look at various cultural characteristics of Vietnamese consumers and their preferences. Certain cultural groups tend to have similar needs especially when it comes to food, confectionery, and drinks. For instance, there are traditional Vietnamese who do not want to try new, strange products but prefer only familiar flavors like Vietnamese tropical fruits, chocolate, coffee, and vanilla with light and medium-sweet taste. There are modern Vietnamese who like to try new things, especially from foreign countries, prefer exotic, unfamiliar flavors like cheesecake, green tea, and berries in form of ice cream, frozen yogurts, or sorbets. Therefore, these segments can affect very much in Magnuminnovative product line of introducing new flavors. Or another example is that in the North Vietnam, people prefer ice cream with a milky, sweet or traditional flavors such as green bean, green rice, chocolate… while in Ho Chi Minh City ( in the South), the favorite ice creams are which have fruit flavors like mango, strawberry…Ben & Jerry could take into account various regional tastes and preferences in their innovative product line by introducing flavors like Haft Baked ice cream and Chocolate Chip Cookie Dough ice cream for Northern consumers, Chunky Monkey ice cream and Strawberry Cheesecake ice cream for Southern consumers, etc.
Figure 1. Food and drink consumption expenditure on Outdoor meal by
urban/rural areas, value by %, 2002-2010 (VHLSS 2010)
As seen table 12, there is a upward trend of more and more share of Food expenditure spent on Outdoor meal, especially in urban areas like HCMC. This figure can be explained by a more and more busy lifestyle in urban areas as well as steady increase in income and quite abundant financial resource to afford such uneconomic treats comparing home-cooked meals. This figure is relevant for Magnumbecause expenditure on impulse ice cream segment is also included in this “outdoor meals” proportion. The more people are willing to pay for outdoor meals, the more opportune for Magnumbecause that indicates high living
standard and high chance that they will accept the brand into the market.
There are some differences in consumer behaviour by region: people in Hanoi require VIP service, while those in Danang are sensitive to price, HCMC don’t usually shopping at the market. Therefore, Magnum should consider these factors when deciding which city, area to introduce products.
Social classes are groups who share similar values, interests and behaviors,that they are relatively homogeneous and continuous.
The researcher notices that there is a clear link between social classes with income and education level in Vietnamese society. Broadly, there are 3 social classes in Vietnam. There is upper class that is rich, acquire high education (bachelor, master, and above), living an abundant life, working in high-salary/important positions such as top government, private corporation officer, expats/experts, transporting by well-branded cars or motorcycles, buying foreign, high quality/luxurious products. Middle class includes people, who are well-educated (high school graduation, bachelor), living in owned medium/small-sized houses and economic apartments, working in medium-paid jobs such as state-owned companies’ officers, common white-collar workers, transporting by good motorbike brands, using mostly domestic products and have some or little knowledge of foreign brands. Low class includes people, who are barely educated (high school, middle school, and below), live in owned/ rented small-sized houses/ apartments, working as blue-collar workers, farmers or unemployed
The impulse ice cream category is expected to account for a 71.6% share of the ice cream market in 2014, followed by artisanal ice cream and frozen yogurt, with a share of 14.6% and 8.8%, respectively.
It is also expected that both Kinh Do and Vietnam Dairy Products will continue to be major powers in ice cream over the forecast period. Kinh Do has developed a stable position through strong brands, like Merino and Celano, and a wide distribution network of nearly 20,000 retail outlets throughout the country. Metro Cash and Carry Vietnam’s commitment to the Wall’s brand is still in doubt for many. Being a giant player in Vietnamese retailing is not a guarantee of success in ice cream, where the competition is expected to increase in the coming years.
The family is the basic unit and the center of the individuals’ existence and the foundation of Vietnamese society. One of the basic premises that exist within the family structure is the idea of collective identity. The individual’s interests and destiny was rarely put higher than the considerations of the family in the past. According to a research of FTA, Middle-aged women hold 90% of the purchase decisions in the family and they are willing to pay higher prices for reputable manufacturers. Magnum should focus on them when target on family segment.
It is not only the family which affect the consumer buying behavior but also the group outside the family also affect the consumer buying behavior, with whom we interact like friends, neighbors, co- workers etc. In Vietnam, people tend to choose what the majority choose, especially they highly appreciate their friends and colleagues opinions.
According to FTA, 80% of Vietnamese consumers trust experts. Upon receiving product information from experts, Vietnamese consumers are confident about the quality of products, they are considered or immediately purchased. When receiving this information from newspapers / TV and from friends / relatives, they tend to find more information. Not only trust experts in evaluating quality, even after receiving information from experts about the substandard product, the majority of consumers will stop using immediately, this action most clearly when resources information derived from the experts (59%). The construction of expert image for the product like Magnum is a very effective method to promote products and stimulus purchasing.
Nowadays, the young customer life styles are significantly affected by idols and stars, particularly when social media is strongly developed. They might get reference from their idol recommendations on social media (Facebook, Zing me, Twitter...) for an eating, a movie, etc. For example, when Magnum was introduced in late February in Philippine, it enlisted celebrity stylist Liz Uy, fashion designer Rajo Laurel and TV host Raymond Gutierrez as brand ambassadors, who took to their social media accounts to tease about the product. During its press launch on February 28, other celebrities, as well as netizens immediately welcomed the news, with Magnum becoming a top trending topic on micro blogging site Twitter. Magnum can absolutely applied this marketing strategy in Vietnam, where the celebrity
Social status also affects on consumer behaviors. In Vietnam, people in urban area, especially in large city like HCMC, Hanoi, tend to concern about their social status. People in high class want to express and affirm their social status through their appearance and consuming habits. Magnum ice-cream – a premium ice-cream – would be the ideal products to express oneself.
Preferences in ice cream vary according to the gender of the ice cream consumer. Teenage girls prefer healthier products labeled as low fat, mainly among the frozen yogurt products, while teenage boys still prefer the premium ice cream range.
These factors are age and life cycle stage, occupation, economic situation, lifestyle influence consumer' buying behaviour influences on a person or one family patterns. Of those, age, economic situation and life style have the greatest impacts in ice-cream market.
The consumer buying behavior changes with the age of the consumer. In the ice cream industry, the age groups that Magnumshould segment the market into are much younger (but not too young) than other developed countries that it worked with in the past. For instance, in Vietnam, the age of 50 and more barely know to enjoy ice cream as it never existed in their time of youth, or the youngest age group of 0-10 has barely develop their preference for ice cream and mainly rely on their parents’ preference. Therefore, those age groups not even relevant for ice cream industry to start with. Younger consumers are more adventurous in their choices and eat a wider selection if ice cream flavors and frozen desserts while older consumers tend to be faithful to their favorites.
According to FTA, Word of mouth plays an important role in the buying habits of younger consumers. When relatives or friends directly recommend a products to them, they can easily decide to buy the product compared to receive information from ads on TV or other sources.
(Source: Taylor Nelson Sofres (TNS)-2011)
As can be seen from the table, two-thirds of Vietnam’s population is comprised of low income groups. The chart shows that, 1.5% of Vietnam’s population, equivalent to 1.3 million, can afford to live the high life. According to our survey, the members of this group often use high class services, luxury goods and of course travel overseas. They are as affluent as in the western world.
To be attracted to eating super-premium ice cream, people need to be part of a particular lifestyle segment. They should technically be among those that enjoy the luxury and indulgence associated with the brand.
More concern on health and eating habits. Magnum is premium ice cream, Vietnamese tend to think it has high quality, more safety competitiveness of Magnum is higher than other creams
In Vietnam at the moment, domestic dairy products are of low quality;
customers find it hard to trust their local quality standards.. As a result, Vietnamese now tend to use foreign products, as they perceive them of higher quality and better customized to their needs. In the last five years, the franchising market has also been developing very rapidly. A lot of well-known brands in the world, mostly in the food sector, such as fast food, bread, pizza, coffee and ice cream, like KFC, Lotteria, Jollibee, BBQ, Pizza Hut, and recently Starbuck have penetrated and had some initial successes in the domestic market.
Internet is becoming more popular in Vietnam, which is an indispensable part of their life. Vietnam has over 31 million internet users, accounting for 35.4% of the population, daily internet users account for 66%.
In Vietnam, Facebook and other social media is becoming an important part of the life of many people, especially young people. Overcoming Taiwan, Indonesia, Philippines, in 9/2012 Vietnam has 13.1 million YouTube users, each viewer watch about 137 videos/ day (Comscore). Number of Facebook users in Vietnam as of 24.10.2012 amounted to 9.11748 million, an increase of 5.479 million users within the last 6 months. Average, Facebook has more than 30 thousand people participated/ day.
With these statistics, it can be said that advertising via internet, particularly via social media like Facebook, Zingme is going to be a very effective method. Magnum should consider this factor when marketing its products.
Finally, probably the most important factor is the psychographic. These factors are motivation, perception, learning, beliefs and attitude.
When the buyer’s need is raised to a particular level they become the motives which affect the consumer buying behavior.
Maslow hierarchy of needs
According to Maslow, people have 5 levels of needs. Clearly, regarding to Magnum ice-cream with the slogan “For pleasure seekers”, this type of ice-cream is a product for people who want to satisfy their self-actualization, not only just a food for physiological need.
Regarding to food safety, 84% of consumers concerned about this issue, 50% of consumers are willing to pay up to 15% price difference for a safe brand (FTA)
About the perspective of consumers in quality products, they are well aware of the quality of products, they have their own argue and standards for quality products. According to a research of FTA, 75% said that quality products have clear origins, 60% said that the quality products have a trademark of a reputable manufacturer, 76% said that it is the product that their friends and relatives trust and use, 90% said that quality products are bought from the supermarket.
In term of environment, 35% of consumers in cities will temporarily stop using the product immediately if producing has negative impacts on the environment, 72% of Consumers in Ho Chi Minh City pay special attention to impact on the environment.
Magnum is a premium ice-cream, with a high price and high quality. So its position is on the top. In Vietnam, there are many other types of ice-cream. Some well-known cheap ice-cream of famous manufactures like Vinamilk, Kinh Do (Merino, Kido and Wall’s). These are ice-cream brand for the majority, so they are cheap and have rather low quality. There are also some small and medium-sized ice-cream shops or coffee shops, which sell ice-cream with higher quality and much higher price compared to Vinamilk or Kinh Do. Some prime and larger # shops sell # with a high quality and much more expensive than others like New Zealand, Thuy Ta, Fanny, etc. There are some big competitor with ~ from foreign brand like BUD’s, MOF, Sweensen, The Fountain, Goody, etc. these are # brand from foreign countries (America, Japan, Italy, Switzerland) so their # have almost as high price and quality as Magnum.
Magnum customers in Vietnam are distinctly different from regular ice cream consumers. They are generally affluent and discerning individuals seeking exotic options that are exclusive and sophisticated. Therefore, the most appealing image that Magnum can build in the Vietnamese market was the alignment of a super-premium ice cream brand to attract their target customers who are suffering from the thirst for luxury goods and means to demonstrate their high-class economic status and indicating self-implied worth. With significantly increased buying power and a lessoned stigma against displaying wealth, the upper class Vietnamese population appeared perfectly situated to appreciate the brand’s themes of indulgence and self-gratification.
In carving out a new brand identity in Vietnam, Magnum should not pay too much attention competing in sales volume and profit with the incumbent ice cream players such as BUD’s or Baskin-Robbins at the beginning of the entering. They should rather pay attention in building a strong, stable image of a Western icon of luxury found only on the high streets. Unlike other luxury brands like Louis Vuitton or Cartier, whose customers have to make plan when purchasing those products, ice cream shops mainly enjoy of a decent number of impulse purchasers who may or may not be regular users or plan their visits. No matter how luxurious Magnum positions itself in the market, it should not come to such extreme where consumers perceive them as something snobby or inaccessible. For that reason, the brand should be seen as a more affordable luxury, one that its target niches can enjoy much more regularly than buying Louis Vuitton bags.
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