The Amazing Success of Haagen-Dazs in Shanghai

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Business Research Methods
Date: December 6th 2010
The Amazing Success of Haagen-Dazs in Shanghai
Haagen-Dazs ice cream, why is it so popular among Chinese people? The main purpose of this research is to understand the reason of Haagen-Dazs being so famous and popular in China, Haagen-Dazs’s success comes from how they managed to sell the Ice cream to the Chinese consumers, the brand is not selling just ice cream they are also selling luxury and status. Some important elements for this research are to have knowledge about the ice cream market in China and also to know who is the competition for Haagen-Dazs in China. The competitions are brands that offer the same quality and same range of prices but that don’t offer an extra thing to the consumer. With the help of this information the point of this research will be proven: The success of Haagen-Dazs in Shanghai is more because of the status and luxury that the brand gives than for the product itself because Haagen-Dazs is seen in China as a place of luxury, a place to impress. This research will begin with a very brief analysis of the ice cream market in China, followed by a small comparison of Haagen-Dazs with Cold Stone creamery, which is considered as his competition; to finish there will be an analysis of the participation of Haagen-Dazs in the Chinese market.

1. The Chinese ice cream market.
China is a country that is changing rapidly, is emerging and taking a place in the world as a consumer society, each day there are new products, brands and companies appearing in the life of people in China (Farrell, Gersch and Stephenson). In this occasion the topic is ice cream, some years ago it was considered as a very luxurious snack but nowadays with the increasing disposable income and big economic growth of the population the consumption of ice cream has become very popular (Farrell, Gersch and Stephenson). 1.1 Ice cream in China. Ice cream is a product that has become very known and popular among Chinese consumers, everyday there is more people that likes ice cream and also there are more brands and options of ice cream to consume, In China the market is divided in four segments of ice cream: artisanal, frozen yogurt, impulse and take-home. In 2009 the segment with the biggest market share was the impulse ice cream with 70.1% of the market share, followed by the artisanal ice cream (18.1%), then the take-home ice cream (11.7%) and in the last place the frozen yogurt segment (0%) (“Ice Cream in China”). This numbers show that is more common for people in China to go to some restaurant or store to consume a scoop of ice cream rather than buying the ice cream and eating it at home. According to an industry profile about ice cream in China done by Datamonitor in 2009 the market generated total revenue of $5.6 billions, this represents an annual growth rate of 8.6% for the period 2005-2009. A forecast says that in the period from 2009-20014 the growth of the ice cream market will increase a lot achieving a value $8.6 billion, this growth in the market is related to the growth in the consumption of ice cream in the country. 1.2 Ice cream consumption in China. The consumption of ice cream in china increased heavily the last twelve years. A report from the China Marketing and Media Study database (Sinomonitor) showed that from 70,000 consumers between the ages of 15 to 64 years that were followed to know about their consumer behavior more than 73% of them ate ice cream during 2003 the year in which the report was done. The market experienced the highest growth time between 2005 and 2009; the market consumption increased 7.3% in the period 2005-2009 reaching a total of 1.5 billion liters in 2009, the market is expected to increase to 2 billion liters by the end of year 2014; this will represent a growth of 6.5% for the period 2009-2014 (“Ice Cream in China”). The market will continue growing, everyday there are more customers and more consuming power for the middle class...
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