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Canon Ixus

INTRODUCTION
It is becoming increasingly difficult to ignore the fact that cameras are integrated into our daily life. However, these rapid changes are having a serious effect on the stages of an organisation‟s marketing planning process.
This report critically examines Canon Ixus 110IS and Nikon Coolpix S620 in terms of market share, target market and their marketing strategies. It will then go onto the external and internal influences that could possibly persuade consumers in the decision-making process.
Finally, this report evaluates both brands‟ marketing strategies using buyer behaviour theories and provides recommendations and applications on how to increase the effectiveness of those strategies.
1. MARKET
1.1 SIZE OF MARKET
The camera market in Singapore has grown year-on-year to a total retail value of S$276.4 million in 2008 with retail volume of 445,100 units. Digital cameras are the largest product category and they make up 96.2% of the entire market volume in 2008. (Appendix A-1) The average number of household who possess cameras also increased from 2006‟s 88.0% to 2007‟s 88.7% (Appendix A-2) (Euromonitor 2009).
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1.2 MARKET SHARE
Canon – under Canon Inc – founded in 1937 in Japan was the market leader for cameras for Singapore in 2007. Canon‟s overall market share has grown steadily over the years and had captured 19.3% of the market in 2007. Sony, Olympus and Nikon were the next three largest players in the market, holding 17.7%, 13% and 12.7% respectively (Euromonitor 2009). With more than 60 years of experience in this industry, Canon‟s products not only include cameras it also diversifies to products such as printers and scanners for both business and personal use (Canon Inc 2009).
1.3 COMPANY‟S PRINCIPAL PRODUCT
Canon digital cameras combine a DIGIC imaging processor that brings together camera technology with face detection and optical image stabilizer, in a stylish, sophisticated package that fits nicely in the hand. (Canon 2009a)
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2. COMPETITORS
According to Euromonitor (2009), there are 8 key major players in the camera industry which include Canon, Sony, Olympus, Nikon, Samsung, Panasonic, Fujiflim and Casio. The table below shows the brand shares of these companies.

Source: Trade associations, trade press, company research, trade
interviews, Euromonitor International estimates
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From the table above, we can analyse that Nikon‟s brand share has been growing slowly and it stagnated in 2007 whereas Canon‟s brand share has grown by 0.8% within the same period. Another worthy competitor will be Sony, whose brand share has grown on an average of 1% since 2006. This clearly indicates that Sony‟s market share is catching up with Canon with its wide range of camera products.
The new Nikon Coolpix S620 compact digital camera has an inbuilt custom-optimised auto white balance, which is a DSLR technology integrated to deliver a better overall colour (Nikon 2009a).
Canon, on the other hand, launched the Ixus 110IS, which has new features such as HD movie recording and scene detection technology (Canon 2009e).
According to Euromonitor (2009), Canon also faces indirect competition from the mobile phone industry. Despite constant improvements in their in-build camera technology for the past 12 years, they still cannot take away sales from the medium and high-end digital cameras, which is where the bulk of market growth comes from (Euromonitor 2009).
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3. IDENTIFICATION OF TARGET MARKET
3.1 PRIMARY TARGET MARKET
3.1.1 DEMOGRAPHICS
The average household income (combined) of Singaporeans has increased to $4950 per month in 2008 (Singstats 2009). Generation Y (Age between 15 to 32 in 2009) are interested in style, trend and are in constant search of new technology (Tulgan & Martin 2001).
According to our observations, Canon‟s target segment is young single women between 20 to 32 years old (Generation Y) while Nikon‟s is young married women.
3.1.2 PSYCHOGRAPHICS
A target market segment can be analysed using the AIO inventory which helps identify relevant aspects of a consumer‟s personality based on activities, interests and opinions that exposes the consumer‟s buying motives, believes and values (Schiffman & Kanuk 2007).
Although both target segments come from the same primary target market, both brands differ in target segments. Based on our observations, Canon recognises young single women with active lifestyles often enjoy taking photos mostly with compact digital cameras. Whereas Nikon recognises young married women prefer capturing moments of their family.
Sivulka (2009) stated that manufacturers had started emphasizing on colour, fashion, and style, aimed at women consumers because marketers recognise women as the primary consumers of compact digital cameras.
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Therefore, both Nikon and Canon are targeting young women with flashy and funky designs of digital cameras.
3.1.3 BEHAVIOURAL
The purchase of compact digital cameras is an extended decision making process as consumers do not purchase cameras often. Canon‟s efficient after-sales service and knowledgeable sales staff will positively influence the purchase of cameras (Pappu, Quester & Cooksay 2007).
Consumers are deal-prone as illustrated by the recent PC show held at Suntec City, where it attracted over 1.16 million visitors and gathering an estimated sales revenue of $52.1 million, which Canon and Nikon participated actively (Thepcshow.com 2009).
3.2 POTENTIAL MARKET SEGMENTS
It can be clearly seen that travels have been peaking during the recent NATAS travel fair with a record of 14% increase and a 10% increase in total departures from Singapore in 2008 from previous year (Euromonitor 2008). Brown and Orsborn (2006) stated that the behavioural aspects of the baby boomers consist of high purchasing power and influences of overall household spending, which ideally situates a potential market segment. Taken together, we envisage the recommendation by targeting the baby boomers (34 years old to 53 years old) and integrate the behavioural aspect to motivate purchases.
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According to a blog posted by Nick Burcher, in July 2009, the users of Facebook in Singapore was ranked 29 globally totalling of 1,384,760, which was a 198% increase compared to July 2008.
Aside from the vast array of age groups using Facebook, we recommend a specific segment (female age below 20) that seeks vibrant and funky designs (psychographic aspect) of cameras as they constantly upload images of themselves onto Facebook. Baron (2008) highlighted that research shown the female users uses Facebook more intensively in comparison to male and as users of Facebook, we observed an exponential increase of the social networking website as a medium to share photographs online, which supports our recommendation for potential market segment.
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4. EXTERNAL INFLUENCES
4.1 CULTURE AND SUBCULTURE
Women in our target segment are mostly working or schooling and always on the go, thus valuing convenience. Both Canon and Nikon are able to deliver attributes such as user-friendliness, compatibility and mobility that consumers look for when buying digital cameras (Streetdirectory 2009a). However, Canon compact digital cameras seem to cater to young single females whereas Nikon's seem to attract young married women. The value behind both Canon and Nikon shows collectiveness. Canon shows collectiveness in terms of friendship whereas Nikon portrays family collectiveness. From the print advertisements, Canon translates fun with friends (I-weekly 2009a) whereas Nikon translates capturing precious family moments (I-weekly 2009b). Cultures or subcultures have little influence on the purchase of compact digital cameras, however, in Singapore; we value collectivism and as such align the theoretical concept of other-oriented values depicted as a methodology for guidance during purchase (Quester et al. 2007).
The two brands aim in satisfying the dominant culture within Generation Y females in terms of performance and immediate gratification (Johnsons & Learned 2004). Users can immediately view their captured image, delete unsatisfactory photos, transfer them onto computers to share with friends or print using a portable printer. The compact digital camera is hassle free with an extended battery life and expandable memory (Streetdirectory 2009b). As such, their advertisements therefore focus on user-friendliness as well as attractive specifications to adhere towards the target segment.
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4.2 DEMOGRAPHICS
The following demographics are influential towards consumption of
compact digital cameras.
4.2.1 AGE
Age plays a role as the target users are mainly from younger generation who are tech-savvy. These products primarily target the Singaporean Generation Y market that are seen as more confident, Internet-savvy and are more affluent than their Asian counterparts. They are also interested in the latest technologies and frequently upgrade to the latest IT gadgets (Seah 2004, p. 1).
4.2.2 GENDER
Females value style, colour and compactness of the camera that can be conveniently carried around. When purchasing electronic gadgets, they prioritise outlook and convenience whereas men focus on specifications (Ganapati 2009). Canon features more females in their advertisements enjoying using Canon's products. Hence, female audiences can relate to the advertisement and change their perception that cameras are a men‟s products.
4.2.3 SOCIOECONOMIC
Socioeconomic factor is influential as this product involves extended decision-making. In Singapore, the target market comprising of young single females with purchasing power and young married females from dual income families is generally affluent. According to Singstats (2009), the percentage of females in the workforce increased steadily over the past decades, implying that more women possess purchasing power to obtain goods.
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Computer and Internet usage is also common with over 60% of the population owning a personal computer and over 50% with access to the Internet (IDA Singapore 2009).
4.3 GROUP INFLUENCES
Group influence is associated with reference groups. A reference group is a group that an individual uses to guide their behaviour. A reference group can influence an individual in three ways. They are normative, informational and identification influence. Group influence is very strong for digital cameras as it is a highly conspicuous product (Blythe 2008).
4.3.1 NORMATIVE INFLUENCE
There is a fundamental human need to belong to social groups. Thus, people tend to follow the suit of others within the group when they see them behaving in a certain way or making a particular decision (Wren 1999). For example, if a woman sees that all her friends carry a compact digital camera in their handbags and snapping photos everywhere they go, she would feel left out if she does not possess her own digital camera.
4.3.2 INFORMATIONAL INFLUENCE
When an individual copies other peoples‟ behaviour or decision and assumes they know what the others are doing(Quester et al. 2007). For example, a woman may purchase a Canon compact digital camera because she remembers her friends saying how user-friendly it was without even doing research on the user-friendliness of Nikon compact digital cameras.
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4.3.3 IDENTIFICATION INFLUENCE
This type of influence involves what a particular image the person identifies certain objects with (Blythe 2008). For example, if a female sees herself and friends having many photos on a social network website such as Facebook would mean that she is a well-liked person with an active social life, she would start taking more photos during social gatherings and upload more photos on such websites.
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5. INTERNAL INFLUENCES
5.1 NEEDS AND MOTIVES
According to Hutchison, Allen and Macy (2006), consumers make purchases when they sense a need or want. Although the actual state and desirability changes constantly, its motives will continue to drive consumers toward the objective.
In addition, Reid and Bojanic (2009) stated the importance of feedback as it allows the consumers to remain loyal to a certain brand or product.
Product positioning is established to identify the needs and wants of consumers, which will be discussed using two of Maslow‟s hierarchy of needs namely, social and esteem needs.
5.1.1 PRODUCT POSITIONING
Canon uses the IXUS slogan „Where style meets substance‟ to market their position (I-weekly 2009a). The following two sections will address how Canon position it‟s product to satisfy different needs or motives.
5.1.2 SOCIAL NEEDS
The need for love, belonging and acceptance by friends drive purchases as people feel the need to enter and be accepted in a group (Kurtz 2008). The purchase of a camera serves as a basic functional need whereas the type of camera purchased satisfies a social need (Mooij 2003). Hence, the target segment will be able to correlate the brand image as a perceptual way to satisfy their social needs.
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5.1.3 ESTEEM NEEDS
Esteem needs focus on individual desire for self-attainment (Quester et al. 2007). It includes recognition and prestige (Michman, Mazze & Greco 2003). Canon taps on the validation amongst friends as a strategy to motivate consumers to purchase, hence satisfying their self-esteem.
5.2 PERCEPTION
5.2.1 EXPOSURE
Exposure happens when people experience stimuli with their senses, such as sight, smell, touch, hear and taste. However, selective exposure occurs when people find out what they do not desire and only accept certain stimuli (Botha, Strydom & Brink 2004). Marketers are required to use big, loud, colourful and many other stimulus for advertisement to increase the chance of exposure. The perception begins with exposure then attention, interpretation and memory (Quester et al. 2007).
5.2.2. ATTENTION
Attention begins when triggered senses transferred to the brain, which sift out stimuli that the person is not interested and focuses on preferred messages and advertisement (Botha, Strydom & Brink 2004). In order for marketers to strategically plan for the next advertisement, there are areas in which they should consider.
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5.2.2.1 SIZE AND INTENSITY
The impact with big advertisement is much greater than a smaller scale one; furthermore, the intensity of the stimulus being attractive by being loud or colourful will yield higher attention (Quester et al. 2007). Some examples include soothing music followed by a loud interception, a black and white advertisement transforming into colours.
However, Botha, Strydom and Brink (2004) mentioned if someone is looking for a need, the attention given to the stimulus would be greater when he is interested. Hence, marketers have to try overcoming selective attention by increasing size, intensity and having more colours, including movements instead of still images.
5.2.3 NIKON/CANON ADVERTISEMENT
The Canon advertisement depicted a group of happy youngsters, focusing on fun (I-weekly 2009a). However, Nikon positioned its product using toys and kids as their main aspect to reach out to consumers (I-weekly 2009b).
Both advertisements employed bright colours to gain attention and adopted a funky theme to reduce selective attention.
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5.2.4 INTERPRETATION
Interpretation refers to what people believe in and is subjected to the objects, messages and meaning of the stimuli (Quester et al. 2007). In light of globalisation, different cultures affect the focus of advertisements as culture reinforces our beliefs and determines our perceptions. Mooji (2003) supported that a successful advertisement in one country may not succeed in other. In addition, Quester et al. (2007) mentioned that such interpretation falls under affective interpretation, which is normative within culture as it is affected by stimulus of an advertisement.
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5.3 LEARNING
There are different types of learning theories. However, the most appropriate learning theory to use in promotion lies under classical conditioning.
Classical conditioning theory depicts a methodology in relation between a stimulus and response. The unconditioned stimulus includes music, images of love and care, which brings unconditioned response (Quester et al. 2007). Furthermore, Canon uses additional slogans like „fun with Canon‟s wide-angled IXUS 110 IS‟ and „your shot is a brilliant one every time‟, which connects conditioned stimulus to conditioned response.
Consumers learn about the attached emotion conveyed in advertisements. An association will formed when repeated exposure occurs as it bridges the emotion to the advertisement (Quester et al. 2007). A promotion on media gadgets further allows our potential target segment to use their newfound „concept‟ to make a purchase decision based on the perception they have learnt. Therefore, to satisfy various needs, as mentioned earlier, marketers use advertisement to „educate‟ their potential target segment and align their product to suit the consumers need. Canon uses fun loving advertisement images to attract and educate its potential target segment of female below 20s as this segment values „funkiness‟. This will ensure that our potential target segment will correlate fun with Canon cameras in future.
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5.4 LIFESTYLE
Singapore is rated by fortune magazine as one of the best cities with excellent lifestyles to reside in (Focussingapore 2009).
There are 8 different categories of lifestyle under VALS; they include innovators, thinkers, achievers, experiencers, believers, strivers, makers and survivors.
Both Canon and Nikon products appeal to the innovators, achievers and experiencers.
5.4.1 INNOVATORS
Innovators believe in self-dependency and have a high level of esteem and resources. They stretch their interest widely and are receptive to new products in the market (Quester et al. 2007; Kerin, Hartley & Rudelius 2003). Therefore, Canon, having the latest technology, is appropriate for innovators as a cultivated way of life.
5.4.2 ACHIEVERS
Achievers aim to join a group by purchasing established brands. Achievers are the marketer‟s main targets as they value image and regard prestige (Kerin, Hartley & Rudelius 2003). Hence, Canon attracts achievers who are interested in „purchasing‟ an entrance to a group by being fashionable to reflect their status.
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5.4.3 EXPERIENCERS
Experiencers are young, rebellious and impulsive and their purchases include the latest fashion and gadgets. Furthermore, they thrive well without political involvement and have contradictory beliefs (Quester et al. 2007). For this reason, Canon, which explore new experiences, is able to engage experiencers who display impulsive buying behaviours.
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6. CONSUMER DECISION MAKING PROCESS
6.1 INFORMATION FOR DECISION-MAKING
According to Howard and Sheth (1969), consumers learn from their actual experience and information obtained from commercial or social surroundings. They establish evaluative criteria, search for alternative solutions and compare the performance of each alternative solution based on their evaluative criteria (Quester et al. 2007). Our target segment is highly involved in purchase as they believe that having a camera is both a social and esteem need as explained under the internal influence section. They engage in extended decision making as they rely more on external information such as opinions of friends or professional information (Quester et al. 2007). Canon is part of our target segment‟s evoked set because they view Canon as a substitute brand that meets their evaluative criteria (Howard & Sheth 1969; Quester et al. 2007).
6.2 CONSUMER EVALUATION
Evaluative criteria are the necessary features a consumer looks for. Our target segment focuses on style and user-friendliness as the determinants of their buying decision. They adopted the lexicographic model, comparing the evaluative criteria of different brands and selecting the brand that best fit the criteria (Angelmar & Pras 1977).
6.3 CONSUMER SHOPPING ORIENTATION
Since our target segment practice extended decision-making and have knowledge of the product, base on our observations, they select the brand first before deciding on the outlet (Quester et al. 2007; Clubsnap 2009).
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6.4 POST-PURCHASE BEHAVIOUR
Our target segment undergone extended decision-making and is highly involved in their purchase, thus post-purchase dissonance is more likely to occur (Dawes & Rowley 1999). Dissonance tends to be higher when there is a low level of satisfaction (O‟Neill & Palmer 2004). The greater the effort in researching about the product, the higher the consumer is likely to face dissonance (Quester et al. 2007). According to Mitchell and Boustani (1994), before sales purchase such as description on packaging, unbiased information of the product, the store image, advice from family and friends and obtaining information from professionals to confirm its credibility, reduce the possibilities of post-purchase dissonance. In addition, after sales service also minimizes post-purchase dissonance by making purchase decisions revocable and introducing questionnaires to collect feedback (Quester et al. 2007; Canon 2009d).
6.5 DISPOSAL OF PRODUCT
Consumers tend to dispose the camera due to product obsolescence. This disposal could be in the way of selling privately as second hand, dispose off as waste, recycling, or giving it away (Mayers et al. 2002). As every product life cycle ends ultimately, the marketers should be socially responsible to our environment by producing packaging that gives the least impact to our environment (Quester et al. 2007). Canon provides a platform for consumers to dispose off their old cameras through their canon buyback program. From our observation, „trade-in items need not be in working condition‟. This is beneficial to both the consumers and the society as consumers have a proper channel to dispose their unwanted products without harming the environment.
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6.6 CONSUMER LOYALTY
Under comparison, one of our potential target segments does not differ in their loyalty towards Canon. However, Moschis (1992) stated that baby boomers tend to switch brand when monetary incentives are given. Brand loyalty refers to the psychological attachment of a consumer towards the brand (Quester et al.2007). Brand loyalty can be encouraged through product bundling to induce purchase, creating a correlation of the core product with the consumer to establish a relationship among them (Quester et al. 2007). Canon‟s “buy back” program is an example of encouraging brand loyalty. Consumers gain monetary incentives when they trade in old canon cameras and purchase their next product with the brand.
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7. MARKETING STRATEGY
Flickr, a popular online image and video hosting website, compares statistics of cameras and tabulates which are the more popular choices. Evidently, Canon was a prevalent choice among the point-and-shoot camera categories as shown below (Nudjit 2008).
Based on most online forums, Canon and Nikon are the closest competitors with regard to their brand choice (KenRockwell 2006; Clubsnap 2009; Dpreview 2009; Deviantart 2009).
Mr. Ogawa, chief executive of Canon Singapore, revealed Canon‟s newly developed strategy which compromises of three inter-linked strategies:
Ensuring that we refresh our products regularly. Developing a new strategy for selling to corporate customers - „Business can be Simple‟. Finally, having a corporate philosophy to customer service - Delighting You Always (Keshvani 2006, pp. 10 - 11).
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7.1 POSITIONING STATEMENT
Positioning statement specifies the unique selling point of the company‟s product. It identifies the company‟s target market, what the product is used for and why should the company‟s product be consumer‟s choice (Silk 2006).
Nikon Coolpix – „Every precious moment, perfectly captured.‟ (I-weekly 2009b).
Canon Ixus – „Where style meets substance.‟ (I-weekly 2009a).
The positioning statements of both companies will be supported by the marketing mix approach discussed below.
7.2 MARKETING MIX
7.2.1 PROMOTION
The promotional strategy of Nikon Coolpix S620 uses emotional appeal by evoking strong feelings to reach out to the target segment (Quester et al. 2007; I-weekly 2009). The slogan, „At the heart of the image‟, taps into the emotional aspect of photo taking by featuring parents and their children (I-weekly 2009b). In addition, Nikon sponsors photo-taking competitions that are family oriented, such as the National Day Parade 2009 photo-taking competition (PhotoFrenz 2009; Nikon 2009c).
Similarly, Canon IXUS 110IS uses emotional appeal by evoking young consumers oriented magazines, emphasizing on the product outlook and associating it with „fun‟ (Canon 2009f; I-Weekly 2009a). Both Canon and Nikon advertise in print medias, internet and broadcast media. We believe these are very effective forms of communicating strategy as it reaches out to the specific target market. For example, Canon print advertisements can be found in
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magazines catered for the young females, this would seem more exclusive to the specific target market (Peter & Donnelly 2003).
7.2.2 PRODUCT
Innovation is the birth of a new product or service and their rate of diffusion is denoted by their speed of penetration in the market (Schiffman & Kanuk 2007).
Digital cameras could be either a continuous innovation, which is often a modification of an existing product, or a discontinuous innovation (Quester et al. 2007). Our target segment perceives digital cameras as a continuous innovation as Canon often modifies its product to be more customize towards satisfy consumers.
The rate of diffusion of products into the target market is determined by factors such as types of decision and fulfillment of need by consumers, marketing effort by the companies, complexity and observability of the products (Quester et al. 2007). Observability can be done by allowing trial of the products at their showrooms (service) and offering photography training (service), hence facilitating a faster diffusion rate (Canon 2009c).
Based on our observation, Canon Ixus 110 IS comes in 4 colours and includes the latest technology. It appeals to their target segment as it is small and handy with nice curvatures on the exterior. On the other hand, Nikon Coolpix S620 also comes in 4 colours and is slightly lighter in comparison to Ixus 110 IS. However, It appeals to their target segment as it brings back nostalgic moments with a classical and sleek design.
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7.2.3 PRICE
Canon- S$549 (Canon 2009b).
Nikon- S$529 (Nikon 2009a).
The price would be perceptible to consumers as an indicator of a product‟s quality in relation to its brand, if the consumer is not knowledgeable on the product and its brand name (Schiffman & Kanuk 2007).
Both Canon and Nikon prices are differentiated by a slight margin, which might not pose any competition amongst the target segments.
However, price is an evaluative criterion that consumers consider before making a purchase. As supported by Quester et al. (2007), surrogate indicator such as price could be either predictive or confidence value. Price as a predictive value could be an indicator to assess the product quality (IXUS 110IS & Coolpix S620) as opposed to consumers who are able to distinguish between brands.
Canon‟s target segment would likely respond to price reductions readily as generally, sales increase when prices are reduced before returning to original sales figures when price reductions cease (Hanssen 2001).
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7.2.4 PLACE
Both Canon and Nikon products are available at retail stores and online purchasing platforms. They adopt similar distribution system and are accessible to the target market. Young females may fall under the categories of three of the VALS segments mentioned in sections 5.4.1 - 5.4.3. Innovators and Achievers, being more image-conscious, would most likely purchase products online as the process is quick and easy. Furthermore, Achievers are career and work-oriented, so online platforms act as ideal distribution channel for them as they are hassle-free comparatively to buying from retail stores. Experiencers, on the contrary, would respond more readily if tangibly exposed to the products. They would most likely purchase the products from more prestigious retail stores where products are perceived to be more desired in addition to test-try the products (Peter & Donnelly 2003).
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8. EVALUATION AND RECOMMENDATION
We consider Canon‟s advertisement more effective in terms of reach and rate of exposure as compared to Nikon. Canon uses both high reach and frequency to continuously enhance their brand image and positioning statement. However, both Canon‟s and Nikon‟s print advertisement are targeting at almost the same segment in terms of age but certainly different in household life cycle. Aside from the household life cycle difference, Nikon incorporates a „warm‟ feeling for the Coolpix series that allow consumers to be attached emotionally while Canon integrates the theme of being „funky‟ to their line of Ixus product.
The advertising campaign, which encompasses the message, comprises of the strategy as the crux for marketing and it is base on the target segment stated. The positioning statement allows consumers to believe that Canon or Nikon will empower them with their needs, however, we believe that Canon injects a strong sense of emotion as oppose to Nikon.
The role of communication for Canon and Nikon is to let consumers consider our chosen product as an option when selecting a new camera. The single most important point for Canon is the ability to capture „fun‟ while Nikon captures the „moment‟.
One significant finding between both the print advertisements is that Nikon advertises four different cameras in one print advertisement while Canon‟s advertisement focuses only on Ixus 110 IS. The advantage of displaying a wider range of product line in the advertisement is for comparison. However, consumers might be confused when learning about a new product. Hence, Canon strategy narrows down the choice to deliver a simpler message to the targeted audiences.
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Furthermore, Canon‟s advertisement uses iconic symbols to ease the understanding of technical jargons, which enhances product differentiation that Nikon fails to deliver. Additionally, Canon includes price and promotion that are vital information to reinforce consumer-purchasing decision. Aside from technical jargons, the Ixus advertisement provides the available camera colours for consumers to consider, which Nikon omitted. Hence, the justification of why Canon‟s Ixus advertisement outreaches target consumers over Nikon are clearly defined.
Although both brands have eye catching print advertisements, Canon does a better job at explaining the product features in a way that first time camera users can understand.
With the success of Canon Photo Marathon last year, Canon is introducing Canon Photo Marathon Asia which is a large scale photo competition involving 6000 participants from 6 countries travelling across Asia. It is one of the region‟s largest and most recognised photo competitions. Such events not only draw attention to Canon but it is an avenue for Canon to build relationships with new and existing customers (Canon 2009g).
From our research, Canon has satisfactory after sales services that can be further improved. Currently, Canon only has one customer service center located at HabourFront, which is only open during office hours on weekdays. This makes it difficult for working adults to send their cameras for servicing. Canon can open more customer service outlets located islandwide for easy access and to have these outlets open during weekends as well.
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Since Canon Ixus‟s positioning statement is „Where style meets substance‟, Canon should focus on how to accentuate style as a selling point. One way to do this is by introducing interchangeable skin for the cameras. Canon has done a good job in the product itself but it can enhance the product‟s package by selling the interchangeable camera skins as accessories. In that way, consumers have more choice then to stick to the limited colours offered and they can switch designs according to their mood and preference.
Canon can improve their marketing communication by increasing the level of exposure of their print advertisement to facilitate the learning process especially when introducing a new product. While putting the company‟s website is a good way for consumers to learn more about the product, Canon can increase the likelihood of visits to their website by including a quiz about the camera in their advertisement. Consumers can submit answers online and can stand a chance to win the camera. This method not only encourages learning of the product but also creates a desire for the product.
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9. CONCLUSION
This report has given an account of and the reasons for the widespread use of digital compact cameras and given understanding of consumers' behaviour through thorough analysis and synthesis in terms of demographics, psychographics and behaviour, which aids in the recognition of market trends.
Returning to the question posed at the beginning of this report, it is now possible to state that both external (culture and group influences) and internal influences (people‟s differing needs, motives, perception, learning and lifestyle) are contributing factors to consumers‟ purchase decision.
One of the more significant findings to emerge from this report is that Canon‟s target segment engages in extended decision-making. Thus, before and after sales service is vital to reduce the impact of post-purchase dissonance. It was also shown that marketers should also be socially responsible to the environment and promotes brand loyalty through product bundling.
Taken together, these results suggest that as consumers are constantly learning from their actual purchase experience and information retrieved from the commercial or social surroundings, Canon and Nikon‟s marketing strategy must be competitive so as to attract more consumers as well as retain their current market share. (5169 words)
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10. GROUP PERFORMANCE REPORT
Name
Performance
Level of participation
Section done
Luo Yan Fang
Outstanding
Intense
(6) Consumer decision process & (9) Referencing
Benedict Tay
Outstanding
Intense
(5) Internal influences (8) evaluation and recommendation
Isa Abu Samah
Outstanding
Intense
(4) External influences (8) evaluation and recommendation
Kelvin Seah
Excellent
Intense
(1-3) Market, competitors, identification of target market
Kareen Lee
Excellent
Intense
(7) Marketing strategy
Group performance:
Relatively this report was done with minimum hiccups, however, it would be better if some group members seek clarification of their part before attempting. It will firstly reduce the amount of time to go over the section and try troubleshooting. Aside from that, we are all well aware of the criticality of the report‟s requirements and we started as early as possible to prevent last minute work. Those that finished their sections early were then tasked to oversee and edit the rest of the sections. 2 parts that were reevaluated was section 3 (identification of target market) and 7 (marketing strategy), which needed the most amendment. Overall, the balance of the group‟s performance aids to augment the criticality of this report.
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APPENDIX A1
Extracted from www.euromonitor.com
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APPENDIX A2
Extracted from Euromonitor.com
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Magnum

 

Buyer Behaviour

TABLE OF CONTENTS

INTRODUCTION 5

1.0       MARKET 5

1.1   SIZE OF MARKET 5

1.2   MARKET SHARE 6

1.3   MARKET POSITION 7

1.4   BREATH AND DEPTH OF PRODUCT RANGE 8

1.5   COMPANY’S PRINCIPAL PRODUCTS 9

1.6   POSITIONING OF PRODUCT 10

1.7   PRODUCT LIFE CYCLE STAGE 10

2.0       COMPETITORS 10

2.1   DIRECT COMPETITORS 10

2.2   INDIRECT COMPETITORS 11

3.0       IDENTIFICATION OF TARGET MARKET 11

3.1   PRIMARY TARGET MARKET 11

3.2   POTENTIAL MARKET SEGMENTS 12

4.0       EXTERNAL INFLUENCES 16

4.1   CULTURE AND SUBCULTURE 16

4.2   DEMOGRAPHICS 17

4.2.1    AGE 17

4.2.2    GENDER 17

4.2.1    SOCIOECONOMIC 18

4.3   GROUP INFLUENCES 18

4.3.1    INFORMATIONAL INFLUENCES 18

4.3.2    NORMATIVE INFLUENCES 18

4.3.3    IDENTIFICATION INFLUENCES 19

5.0       INTERNAL INFLUENCES 20

5.1   NEEDS AND MOTIVES 20

5.2   PERCEPTION 21

5.3   LEARNING 22

5.4   LIFESTYLE 23

6.0       CONSUMER DECISION PROCESS 24

6.1   SEARCH FOR INFORMATION 24

6.2   EVALUATION AND SELECTION 26

6.3   OUTLETS AND STORE CHOICES 27

6.3.1    STORE IMAGE 27

6.3.2    RETAIL ADVERTISING 27

6.3.3    OUTLET LOCATION 27

6.4   POST PURCHASE BEHAVIOUR 28

6.5   DISPOSAL OF PRODUCT 28

6.6   CUSTOMER LOYALTY 28

7.0       MARKETING STRATEGY 29

7.1   PRODUCT 29

7.2   PRICE 30

7.3   PROMOTION 31

7.4   PLACE 32

8.0       EVALUATIONS AND RECOMMENDATIONS 33

8.1   EVALUATIONS OF ADVERTISING CAMPAIGN 33

8.2   FUTURE RECOMMENDATIONS 34

8.2.1    PRODUCT POSITIONING 34

8.2.2    PRODUCT (GOODS AND SERVICES) ENHANCEMENT 34

8.2.3    IMPROVED MARKETING COMMUNICATIONS 34

8.2.4    IMPROVED PURCHASE EXPERIENCE 35

8.2.5    IDENTIFYING POTENTIAL NEW CUSTOMERS 35

8.2.6    ENHANCING CUSTOMER SATISFACTION 35

CONCLUSION 36

REFERENCE LIST 37

APPENDIX 1A 40

APPENDIX 1B 41

APPENDIX 1C 42

APPENDIX 2 43

APPENDIX 3 44

APPENDIX 4 45

APPENDIX 5 46

APPENDIX 6 47

APPENDIX 7 48

APPENDIX 8 49

INTRODUCTION

This report critically examines Magnum and Häagen Dazs in terms of market share, target market and their marketing strategies. It covers the external and internal influences that could possibly persuade consumers in the decision-making process. Finally, this report evaluates the marketing strategies of both brands using buyer behaviour theories and provides evaluations and recommendations on how to increase the effectiveness of those strategies.

1.0       MARKET

1.1       SIZE OF MARKET

The ice cream market in Singapore has a total retail value of S$153.12 million and a total retail volume of 15,045,100 litres in 2010 (refer to Appendix 1A: Volume Sales). The market is forecasted to grow on a yearly basis from S$153.12 million in 2010 to $S170.29 million in 2015 (refer to Appendix 1B: Sales Forecast).  

1.2       MARKET SHARE

Magnum's overall market share has grown steadily over the years and has captured 5.61% of the market in 2009 (refer to Figure 1A: Market Share of Ice Cream in Singapore during 2009). Cornetto, Drumstick, Magnolia and Häagen Dazs were the next four largest players in the market, holding 20.6%, 10.75% and 7.97% and 4.81% respectively (refer to Appendix 1C: Brand Shares).

Figure 1A: Market Share of Ice-Cream in Singapore during 2009

1.3       MARKET POSITION

Figure 1B: Perceptual Mapping of Ice cream brands

The market position for Magnum and its competitors is demarcated by perceived price and perceived quality. Magnum has a relatively high perceived price due to its exclusive image and extensive marketing campaigns which allowed it to achieve island-wide recognition. It is also perceived to be of high quality and is able to deliver the concept of ‘pleasure’ that Magnum projects, thus justifying it as a premium brand (refer to Figure 1B: Perceptual Mapping of Ice cream brands).

1.4       BREADTH AND DEPTH OF PRODUCT RANGE

Magnum carries a variety of ice cream which ranges from the bars to the minis which are smaller variants to satisfy consumers with smaller appetites or calorie-conscious consumers (refer to Table 1A: Product Range (Magnum 2011c)).

Magnum Double Caramel	Magnum Almond	Magnum Classic
Magnum Gold	Magnum Golden Hazelnut	Magnum Mini Liqueur
Magnum Mini (Classic, White and Almond)	Magnum Mini (Double Caramel & Double Chocolate)	Magnum Mini (Double Mocacchino)

Table 1A: Product Range (Magnum 2011c)

 

1.5       COMPANY’S PRINCIPAL PRODUCTS

The principal products of Magnum are its ice cream bars (refer to Table 1B: Principal Products).

	Features and Benefits
Magnum (Bar)	·         Thick bar of vanilla ice cream covered with Belgian milk chocolate ·         Variations such as Magnum Classic, Magnum White, Magnum Almond and Double Caramel ·         High quality chocolate  (Magnum 2011b)
Magnum Mini	·         Comes in packaging of 6 mini magnum ice creams ·         Half the size of the bar ·         Snack size for calorie conscious consumers                     (Magnum 2011b)

                                                Table 1B: Principal Products

1.6       POSITIONING OF PRODUCT

From its packaging and advertisements, it is evident that Magnum is trying to position itself as a high premium quality chocolate ice cream product for "pleasure seekers". The positioning strategy used by Magnum is targeted at the working class woman who can associate themselves with the advertising campaigns and slogans.

1.7       PRODUCT LIFE CYCLE STAGE

Figure 1C: Product Life Cycle Stage (QuickMBA 2007)

Magnum is considered to be currently in the growth phase, as indicated by the red arrow (refer to Figure 1C: Product Life Cycle Stage (QuickMBA 2007)). The sales of Magnum have increased over the recent years as consumers are now more aware of this product through the expansion of intense television advertisements and creative marketing campaigns. Magnum's goal during this stage would be to gain consumers' preference and further increase their sales.

2.0       COMPETITORS

2.1       DIRECT COMPETITORS

Magnum has a number of direct and indirect competitors with its main direct competitor as  Häagen Dazs which competes against Magnum in the premium ice-cream category. Although both products adopt similar price strategies and distribution channels, they differ in their promotional strategies (refer to Table 2A: Magnum VS Häagen Dazs).

	Magnum (Double Caramel)	Häagen Dazs (Vanilla Almonds)
Product
Price	· SGD$14.50 per box of 4 ice-cream bars (refer to Appendix 6: POP Displays)	· SGD$15.90 per box of 3 ice-cream bars (refer to Appendix 7: Competitor’s Pricing)
Promotion	· Commercials  · Radio and Internet · Printed media · Road Shows	· Printed media
Place	· Convenience stores: · Supermarkets	· Convenience stores · Supermarkets · Häagen Dazs outlet

Table 2A: Magnum VS Häagen Dazs

2.2       INDIRECT COMPETITORS

Magnum’s indirect competitors are shown in Table 2B: Indirect Competitors. These products target same market segments and they differ in terms of cost positioning from Magnum and Häagen Dazs.

	Cornetto (Royale)	Drumstick (Kit Kat)	Magnolia (Supremo)
Product
Price	· SGD$2.60 (refer to Appendix 2: Receipts)	· SGD$2.40             (refer to Appendix             2: Receipts)	· SGD$2.30             (refer to Appendix             2: Receipts)
Promotion	· Printed media · Internet	· Printed media	· Printed media
Place	· Convenience stores · Supermarkets	· Convenience stores · Supermarkets	· Convenience stores · Supermarkets

Table 2B: Indirect competitors

3.0       IDENTIFICATION OF TARGET MARKET

3.1       PRIMARY TARGET MARKET

Table 3A: Market Segmentation will further elaborate on the market segmentation of Magnum and its competitor, Häagen Dazs based on the demographics, psychographic and behavioural of the targeted consumers.

Table 3A: Market Segmentation

	Magnum Double Caramel	Häagen Dazs Vanilla & Almonds Bar
Demographics	·         Target Market: Tertiary and working women aged between 18-40 years old. ·         Developed as a "premium adult offering” (Unilever 2011a). ·         Medium – High income levels with the ability to indulge in $14.50/box of 4 ice-cream bars (refer to Appendix 6: POP Displays)	·         Primary Target Market includes: Male and Female professionals aged between 18-35 years old. ·         Häagen Dazs is well-known as a "super-premium brand” (Häagen Dazs 2011). ·         Medium – High income levels who love to indulge in $15.90/box of 3 ice-cream bars (refer to Appendix 7: Competitor’s Pricing)
Psychographics	·         Activities: Entertainment -          Gatherings -          Leisure ·         Interests: Luxury food  e.g. chocolate and ice cream ·         Opinions: Peer Influence -          Word-of-mouth ·         Personality: Sociable, Indulgent, Fun-Loving	·         Activities: Work and Entertainment             -  Entertaining business             clients             - Leisure             - Family Oriented ·         Interests: Career, Family and Luxury food ·         Opinions: Task-oriented ·         Personality: Independent, Ambitious, Coy
Behavioural	·         Benefits Sought: Pleasure and excitement, relieve stress and trendsetting among friends by making Magnum a fashion statement.	·         Benefits Sought: Relieve stress, sensory taste and relaxing experience (Häagen Dazs 2011).
	·         User Status: “Potential Users, First-Time Users and Regular Users” (Beane and Ennis 1987).

Table 3A: Market Segmentation

3.2       POTENTIAL MARKET SEGMENTS

Euromonitor (2010) stated that while other food products suffered, ice cream profited from the recent economic recession as consumers see ice cream as a way to give themselves an incentive treat. Luxury food have only become a norm in today’s society. Therefore, this will not be an issue when selecting Generation X (1965-1976) as a potential market segment. The behavioural aspects of this generation consist of compulsive behaviour and high purchasing power, which ideally means that the possibility of targeting the age range of 40-45, will likely bring about profits as well (Roberts and Manolis 2000). Through the behavioural aspect of occasion, we can motivate purchases with the use of positive emotions.

Although, females are the major consumers of ice-cream, we recommend men of 18-45 years old as another potential market segment. Men do seek to satisfy their hunger, gratify their senses and to escape from the harshness of society, and chocolates do just that, in this case a sweet ice cream experience, “It's the perfect time for a movie and a sweet. I chose Troy, with Pitt in Achilles' shoes and a delicious Magnum” (Zarantonello and Luomala 2011). Males do have a simpler relationship with ice-cream due to their workaholic personality (psychological aspect), which might be easier to market, thus supporting our recommendation for potential market segment.

                                                                       

4.0       EXTERNAL INFLUENCES

4.1       CULTURE AND SUBCULTURE

The endorsement by Rachel Bilson has successfully portrayed Magnum to be the sought after ice cream choice for premium taste and pleasure seekers. Various commercials directed by renowned fashion director, Karl Lagerfeld painted Magnum to be the desired brand of ice cream for women who enjoy treating herself after a hard day’s work (Celentano 2011).

Our target segment appreciates and strives to seek a balance between work and leisure. They require acknowledgement and commendation for their achievements. Driven by their self-oriented culture of leisure, they are able to identify themselves. Placed as a premium ice cream in the minds of our target segment (Unilever 2011a), women would choose Magnum over competing brands when they want to reward themselves.  

Being an Asian country infused with Western influences, there is an increasing culture of sensual gratification in younger Singaporeans. The culture of indulging oneself and fulfilling one’s cravings is on the rise. Hence, the advertisements stress on the sensual aspect to attract the target segment. 

The aggressive and widespread promotional activities for the Double Caramel appeal to those in the ‘Early Adopters’ to ‘Early Majority’. Magnum had invited opinion leaders, such as bloggers, to grace their exclusive pleasure suite for a pure Magnum Double Caramel experience (Kiora 2011).

4.2       DEMOGRAPHICS

4.2.1    AGE

Age has an influence on the consumption of ice cream. It is often the younger generation who are greatly influenced by Western cultures that consumes ice cream, whereas the older generation perceives ice cream as an unhealthy product that should be savoured occasionally.

4.2.2    GENDER

Women are more emotional compared to men, who tend to be more rational. The consumption of ice cream is viewed as a form of stress relief as scientists have shown that chocolates “causes the brain to release endorphins” that causes the consumer to “feel good” (Ciampa 1996).

Therefore, during the purchasing process, women tend to look for products with chocolate content to soothe their senses. The endorsement by Rachel Bilson allows women to relate themselves to her, enabling them to achieve the same sense of happiness and relief.

4.2.3    SOCIOECONOMIC

The socioeconomic factor has a fairly low impact on the buying decision process as it requires low purchase involvement. Studies have shown the correlation between the financial status of a country and food consumption patterns (Drewnowski and Popkin 1997). Being a developed country with higher disposable income, Singaporeans are more willing to purchase luxury food such as ice cream on top of their basic three meals a day.

4.3       GROUP INFLUENCES

4.3.1    INFORMATIONAL INFLUENCES

Informational influences apply when consumers look towards the actions and views of reference group members for information of the product (Quester, Pettigrew and Hawkins 2011). When purchasing a low involvement product such as ice cream, women would not deliberate which brand to opt for. Instead, they would opt for the brand highly recommended by their friends.

4.3.2    NORMATIVE INFLUENCES

Normative influences occur when an individual acts according to the general behavior of the group to gain approval and to fit in (Quester, Pettigrew and Hawkins 2011). When purchasing ice cream, one would choose the brand that their peers consume. This action enables the individual to feel a sense of belonging to the group.

4.3.3    IDENTIFICATION INFLUENCES

Identification influences reflect the use of the group values as a benchmark for one’s attitudes or values (Quester, Pettigrew and Hawkins 2011). In the advertisements, Rachel Bilson is portrayed to be a successful woman who enjoys simple pleasures in life after a hard day’s work. This will attract young working women who are successful and seeking for a balanced life.

5.0       INTERNAL INFLUENCES

5.1       NEEDS AND MOTIVES

Latent motives are motives that are either unknown to the individual or are such that the individual is very reluctant to admit them (Quester, Pettigrew and Hawkins 2011). It could be that Magnum is an amazing ice cream that is sinful, yet more rewarding than other brands. Or that the consumer wants to feel what it is like to enjoy the ice cream. It may even be for consumers to show that “I am eating an ice cream that tells a story about me”, especially when the brand image of Magnum is about the confidence, carefreeness and the willingness or guts to achieve that hankering for pleasure.

Manifest motives are motives that are known and freely admitted (Quester, Pettigrew and Hawkins 2011). Ranging from simple motives such as consuming a premium ice cream, to having a reference group that only Magnum is able to bring about, portrayed by celebrities who endorsed the brand. Even the “telling a story about me” factor could be a manifest motive.                                                                                                                        

It is clear that Magnum has adopted the Approach-Avoidance motivation conflict, whereby the consumer faces both positive and negative consequences (Quester, Pettigrew and Hawkins 2011). As mentioned, Magnum is an ice cream that is sinful, yet more rewarding than it is sinful.

The new Magnum available in Singapore is built on the foundation from the existing brand image and the newly developed Magnum Double Caramel. The brand image created is sought after by consumers. Using Maslow’s hierarchy of needs (Quester, Pettigrew and Hawkins 2011), while Magnum may be a physiological necessity, it is more of an esteem need as it fulfills more of prestige, esteem and a sense of status.

5.2       PERCEPTION

Both positive and negative implications will arise as a result of perceptions.

The first and critical negative implication would be the concern on health issues associated with the consumption of the product.  Senior nutritionist at the Center for Science in the Public Interest, Jayne Hurley commented that “Everyone knows that ice cream isn't good for you — it's a splurge. But most people don't realize how much of a splurge it is” (CBS News 2009). Secondly, marketing of Magnum ice cream is mainly targeted at female consumers. As such, it is very unlikely that majority of the male population will be regular consumers. Whilst Magnum may still be of a unisex category, there is a tendency that men will not consume Magnum when the brand image of the ice cream is intended for women.

However, not all implications are negative. The silver lining, in which is conjecturable that Magnum has intended, is that since marketing is mainly targeted at women, it builds a particularly strong relation with female consumers. Magnum is able to build an image in which consumers can relate to, such as the identity associated with consumption.

5.3       LEARNING

Learning refers to any change in the content or organisation of long term memory as a result of information processing (Quester, Pettigrew and Hawkins 2011). The learning phase of Magnum is crucial in the internal influences it will have on consumers.

With the exception of a minority of health conscious consumers who would compare the different brands, Magnum is generally a low-involvement learning product, where an advertisement brings attention to consumers and is not exactly information specifically sought after. It is up to Magnum to advertise and to stand out from the others, rather than the consumer’s initiative to seek the information.

Classical conditioning is the process of using an existing relationship between a stimulus and response to bring about the learning of the same response for a different stimulus (Quester, Pettigrew and Hawkins 2011). For the target market, Magnum does not simply seek to satisfy a desire for ice cream, it fulfills feelings and emotions. As the brand image suggests, the confident, busy, successful person would be satisfied through consumption of Magnum and the pleasure brought to them. “Seeing Magnum advertisement’s projected brand image (unconditioned stimulus) elicits a positive emotion (unconditioned response) in individuals. If the projected brand images are constantly paired with the product of Magnum, the product itself will elicit the same positive emotion (conditioned response)” (Quester, Pettigrew and Hawkins 2011). Therefore, learning is not informational but emotive.

5.4       LIFESTYLE

Targeted segments can be associated into lifestyle habits and purposes which are those who see Magnum as an instrument of stress relief, those who adopt the trend of eating Magnum through the influence of their peers, and those who simply wish to indulge in pleasure.

It is not uncommon that people seek ways to relieve stress in their daily lives. While others may kick back and enjoy a beer as a well-deserved reward after a hard day’s work, some seek refuge from stress through Magnum ice creams.

Peer influence is another lifestyle habit that affects consumers. Consumers generally do not wish to be left out by friends and family when the latter are thoroughly enjoying themselves eating the ice creams. As a result, consumers would not only sway towards buying Magnum to understand the motivations behind its consumption, but also as a display of social status and being seen as a “Magnum consumer”.

Understanding those who consume Magnum for the purpose of indulging in pleasure is straightforward. Majority of the consumers seek a primary desire to satisfy their need for indulgence. These people are driven by their needs and personal motivations to consume the product.

           

6.0       CONSUMER DECISION MAKING PROCESS

Addressing the decisions that influences a product purchase, consumer decision making process examines five main situations that engage a consumer. The process begins with ‘Problem Recognition’ where it compels the ‘Search for Information’. Consumers proceed with ‘Evaluation and Selection’ before they make a decision to purchase it at selected ‘Store Choices’. The process concludes with ‘Post Purchase Behaviour’ where expectations, performance and satisfaction are matched before the cycle repeats.

6.1       SEARCH FOR INFORMATION

‘Problem Recognition’ gives rise to the need for information search, leading to an increased awareness on a consumer product (Quester, Pettigrew and Hawkins 2011). It begins with the collection of internal information from prior taste experiences on Magnum ice creams.

Magnum Double Caramel targets its consumers through the better use of external search where external stimulus evokes the behaviours of consumers (Quester, Pettigrew and Hawkins 2011). Forums along with popular social network site, Facebook, serve as an information source where consumers gather the opinions of fellow Magnum buyers.

The availability of information is made through Magnum’s official website, magazine article reviews (refer to Appendix 3: Magazine Scans), direct experiences through product launch events (refer to Appendix 4: Direct Experiences) and promotional advertisements generated by the marketers (refer to Appendix 5: Marketer’s Promotional Efforts).

Classified as a ‘low level’ of purchase involvement, consumers find themselves in a ‘limited decision making’ where a simple point of purchase display (refer to Appendix 6: POP Displays) in a supermarket is enough to induce an interest in purchase (Quester, Pettigrew and Hawkins 2011).

In an awareness set, Magnum Double Caramel is classified under the ‘evoked set’ (refer to Figure 6A: Brands in Initial Awareness Set) where consumers highly regard these set of brands as a probable solution to their purchase decision (Quester, Pettigrew and Hawkins 2011).

Remaining impartial to the brands under the ‘inert set’, consumers resort to brands like ‘Cornetto’ in a case where ‘Magnum’, or brands under ‘evoked set’ are unattainable (Quester, Pettigrew and Hawkins 2011). Local brands like ‘Potong’, under the ‘inept set’ are overlooked due to lack of value and unfavourable views based on specific criteria of purchase (Quester, Pettigrew and Hawkins 2011).

Figure 6A: Brands in Initial Awareness Set

6.2       EVALUATION AND SELECTION

Consumers are likely to evaluate Magnum Double Caramel based on conjunctive decision rule where decisions are made once a minimum standard is met (Quester, Pettigrew and Hawkins 2011). The evaluation criterion covers price, taste, brand image, packaging, ease of consumption and nutritional content (refer to Figure 6B: Evaluation Criteria).

Figure 6B: Evaluation Criteria

6.3       OUTLETS & STORE CHOICES

The choice of outlets distributing Magnum Double Caramel sways consumer’s decision making where decisions are affected by the ‘Store Image’, ‘Retail Advertising’ and ‘Outlet Location and Size’ (Quester, Pettigrew and Hawkins 2011).

6.3.1    STORE IMAGE

A ‘Store Image’ can be detrimental to the brand image if the selection, quality and price offered by the specific store do not satisfy consumer needs. The placement of Magnum Double Caramel differs at outlets, where convenience stores usually house it in a freezer out of its store due to space constraints.

6.3.2    RETAIL ADVERTISING

The role of advertising is said to be one of the most effective tool in reaching out to its target audience (Quester, Pettigrew and Hawkins 2011). Price promotions at convenience stores (refer to Appendix 6: POP Displays) easily captivates consumer’s interest. Such appeal allows marketers to introduce bundle deals, in return increasing awareness on future brand extensions.

6.3.3    OUTLET LOCATION

Distribution of Magnum Double Caramel are mainly stocked and sighted at supermarkets and convenience stores where the purchase is made available anytime of the day. Giant, Cold Storage, 7 Eleven and FairPrice Xpress at Esso Mobil Stations are some of the leading carrying outlets (Magnum 2011a). Because of its convenient distribution, consumers are likely to approach the outlet first before considering the brand.

6.4       POST PURCHASE BEHAVIOUR

Dissonance is the dissatisfaction and feeling of discomfort experienced by the consumer after consumption of a product (Nadeem 2007). Questions as to whether customer’s needs are satisfied are answered in ‘Post Purchase’ behaviour. There is a low probability of post-purchase dissonance owing to the fact that decisions made during purchase are forthright, and there is no long-term usage of the product, unlike mobile phones or televisions.

It is important to identify any dissonance in the early stages of product consumption to encourage repeat purchases. An important way of reducing dissonance is to highlight its benefits in comparison to its competitors (Nadeem 2007).

6.5       DISPOSAL OF PRODUCT

There is little to none when it comes to the disposal of a food product specifically an ice cream. Disposal is almost not required (Quester, Pettigrew and Hawkins 2011). Although recycling and exchanging are inapplicable, Magnum Double Caramel is packaged into a box as well as a plastic wrapper and a proper disposal helps promote environmental wellbeing.

6.6       CUSTOMER LOYALTY

Loyalty is a clear commitment resulting from a rational decision based on an assessment of each brand’s benefits (Lichtlé and Plichon 2008).

Although brand loyalty does not assure a devoted loyal customer (Quester, Pettigrew and Hawkins 2011), skilful marketing is needed as customers are prone to purchase other Magnum products upon other brands.

Furthermore, loyalty reinforces consumer’s self concept of their belief towards the brand.

7.0       MARKETING STRATEGY

The following section shall examine the marketing approach engaged by Magnum Double Caramel ice cream bar and Häagen Dazs Vanilla and Almond ice cream bar to determine its market position and its success.

7.1       PRODUCT

Both Magnum Double Caramel and Häagen Dazs Vanilla and Almond are premium ice creams targeted to satisfy chocolate lovers. Magnum Double Caramel comes in the form of an ice cream bar (90g) and has positioned itself as a premium ice cream with its luscious chocolate coating, rich caramel sauce and thick Belgian milk chocolate. The golden brown packaging brings out the premium ‘feel’ of the product.

Similarly, Häagen Dazs Vanilla and Almond comes in the form of a ice cream bar (87g) and has also positioned itself as a premium ice cream, through finding the purest and finest ingredients and crafting them into the best ice cream.

The degree of innovation for ice cream is considered continuous, especially for Magnum as it often introduces new flavours annually to customize and satisfy consumer’s changing taste and preferences. The latest flavour Magnum introduces in 2011 is Double Caramel.

As ice creams are generally perceived by many Singaporeans as weight gaining, sinful delights, this may impede the rate of diffusion into the target market. Thus, one strategy Magnum has adopted is the endorsement of a celebrity, Rachel Bilson to star in the promotion of the Magnum Double Caramel. This allows consumers to alter such negative perceptions of ice creams.

7.2       PRICE

Price would be perceptible to consumers as an indicator of a product’s quality in relation to its brand, if the consumer is not knowledgeable on the product and its brand name (Schiffman and Kanuk 2007).

Price is an important evaluative criterion, as both Magnum and Häagen Dazs pricing strategy is based on the premium product pricing to attract status conscious customers. Berends (2004) suggests that the product’s prestige image and premium price is taken into consideration as part of the value provided in premium products pricing. Hence, Magnum and

Häagen Dazs have priced their products higher than competitors, in order to be perceived as a premium product. The higher price reflects the high quality of the ice cream in comparison to competitors.

The target market would likely respond to price reduction, as sales increases when prices are reduced. For example, Magnum launched a 1 for 1 deal for the Double Caramel at selected supermarkets to gain consumer awareness of the product through greater sales (refer to Appendix 6: POP Displays).

However, if the price reductions were too huge, consumers may change their perceptions of the product image, and no longer see it as a premium product, as prices is often used as a surrogate indicator for quality and status.

7.3       PROMOTION

Magnum’s Double Caramel is targeted as a premium chocolate ice cream for adults. Each Belgian ice cream bar is ready to satisfy one’s self indulgence. These are the values important to Magnum that can be used in the communication strategy.

On the other hand, the finest ingredients, along with the quality assurance that comes with Häagen Dazs trusted reputation is important values used in the communication strategy.

Magnum uses commercial advertising through different channels such as in TV commercials, websites and mobile advertisements. In the commercials, Magnum endorses Rachel Bilson to star in their commercials to promote the launch of the Double Caramel ice cream (Unilever 2011b). In addition, Magnum uses mobile advertisements on buses to promote the newly launch Magnum Double Caramel ice cream (refer to Appendix 5: Marketer’s Promotional Efforts).

These are effective forms of communication strategy as it allows Magnum to reach out to a wide target market of adults who enjoy chocolate indulgence. The greater market share of Magnum as compared to Häagen Dazs is evidence of their success in their communication strategy. 

7.4       PLACE

Both Magnum Double Caramel and Häagen Dazs Vanilla and Almond adopt similar distribution systems, and can be easily found in major supermarkets and convenience stores such as NTUC, Cold Storage, Giant, Shop N Save, 7 Eleven and Cheers which have numerous outlets found at convenient locations.

With the presence of convenience stores carrying these ice creams, even as the working adults (Generation X and Y) become increasingly busy due to their hectic lifestyle, they will still be able to purchase the ice creams easily and readily.

                       

                                               

8.0       EVALUATIONS AND RECOMMENDATIONS

8.1       EVALUATIONS OF ADVERTISING CAMPAIGN

Magnum makes use of isolation by using a light beige background in the print advertisement to captivate interest to the main focus of the celebrity (refer to Appendix 8: Print Advertisments). Häagen Dazs similarly applies the isolation technique; however colours were mostly dark and de-saturated thus making it less engaging than Magnum’s warm and inviting colours.

Magnum endorses a female celebrity in Rachel Bilson, whereas Häagen Dazs engages a non-celebrity model to endorse their products. Rachel Bilson portrays an endearing expression, which entices the target audience to take a second glance at the ice cream she holds onto. In contrast to Magnum’s direct approach, the model in Häagen Dazs advertisement portrays a seductive stare while holding a spoon, rather than the product, making it appear more sexual which may be provocative to some individuals.

Both brands seek to deliver a message of self indulgence through their products. Magnum’s slogan of ‘It’s pure pleasure, from the very first bite’ is easy for consumers to understand the intended message, as compared to Häagen Dazs’s ‘ANTICIPATED LIKE NO OTHER’, leaving consumers puzzled by their ambiguous message. Overall, the use of clear and straightforward advertising efforts by Magnum has proved to be more effective in delivering their intended message to the target audience as compared to Häagen Dazs (refer to Appendix 8: Print Advertisements).

8.2       FUTURE RECOMMENDATIONS

8.2.1    PRODUCT POSITIONING

Magnum should maintain its positioning strategy as a premium ice cream for the working class females. This positioning is aligned with its slogan, 'for pleasure seekers' aimed at females who desire to be relieved from their stressful lifestyle. Furthermore, competitors such as Cornetto has established a large market share in the lower tier ice cream market, hence it is inadvisable for Magnum to target this segment.

8.2.2    PRODUCT (GOODS AND SERVICES) ENHANCEMENTS

Improvements can be made to Magnum by adjusting its level of sweetness to appeal to men who do not have a sweet tooth like most women do (Gunnison 2011). The ice cream will be sold in the same double caramel flavor but with reduced sugar, enhancing the product image to both genders. An insulation pack to keep the product cool will be issued so that consumers can remain outside for hours, doing shopping, without any hassle.

8.2.3    IMPROVED MARKETING COMMUNICATIONS

Magnum can improve their marketing communications with consumers by featuring an interactive website, offering attractive prizes. Through this website featuring games, quizzes and facts relating to ice cream, Magnum is able to build up its potential customer database through the capture of personal particulars. This allows greater exposure and for consumers to have a lasting impression of the ice cream products, while creating a desire for it.

8.2.4    IMPROVED PURCHASE EXPERIENCE

The ultimate aim of Magnum is to provide its consumers with the entirety of satisfaction, consuming the product without any regrets. To achieve that, the idea of Magnum being unhealthy, such as the likelihood to cause diabetes and other health concerns, should be abolished. Product enhancements, as suggested earlier, allows this “guilty pleasure” experience of consumers to dissipate, and form a new perception that is simply “pleasure”.

8.2.5    IDENTIFYING POTENTIAL NEW CUSTOMERS

The current target market can be expanded by tapping into the male market. Similar to the age group of our targeted women, our potential market would be tertiary and working men between ages 18 to 40.

As Magnum can be perceived as a masculine brand due to its name and outlook, it does not require much repackaging. The ice cream is chunky in size, differentiating itself from the usual petite ice cream sizes (Gunnison 2011).

8.2.6    ENHANCING CUSTOMER SATISFACTION

Examining consumers brand loyalty along with their perceived quality towards Magnum grants an opportunity to enhance customer satisfaction. As relationship marketing is identified as the cornerstone of loyal consumers, Magnum ought to observe its consumer behaviour needs before marketing its price and promotions. Consumer relationships will be enforced, unfolding the possibilities of repetitive purchases. Magnum is encouraged to “under promise and over deliver” to ensure going beyond consumers’ expectations (Raphel 2004).

 

CONCLUSION

Magnum’s success is largely due to the marketing of their brand image. Revolving around this strategy, it has succeeded in reaching out to their target audience. It has captivated consumers and influenced their decision making process through the combination of external and internal influences. The understanding of consumer’s behaviour can be reflected in the success of Magnum’s marketing strategy. Thus, Magnum is able to stand out from the rest of its competitors, emerging as a top choice amongst premium ice creams.

WORD COUNT:      4477    WORDS

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APPENDIX 1A: VOLUME SALES

Sales of Ice Cream by Category: Volume 2005-2010

'000 litres	2005	2006	2007	2008	2009	2010
Frozen Yoghurt	-	-	-	-	-	-
Ice Cream Parlours	1,278.01	1,552.78	1,607.13	1,783.91	1,792.83	1,855.58
Impulse Ice Cream	2,936.59	3,019.25	3,084.95	3,154.94	3,286.12	3,426.61
- Multi-Pack Dairy Ice Cream	1,118.72	1,169.06	1,215.82	1,258.38	1,377.92	1,515.71
- Multi-Pack Water Ice Cream	-	-	-	-	-	-
- Single Portion Dairy Ice Cream	1,373.64	1,414.85	1,440.32	1,476.32	1,498.47	1,513.45
- Single Portion Water Ice Cream	444.23	435.35	428.82	420.24	409.73	397.44
Retail Artisanal Ice Cream	-	-	-	-	-	-
Take-Home Ice Cream	8,832.60	9,166.59	9,344.18	9,482.42	9,575.31	9,762.91
- Take-Home Dairy Ice Cream	8,832.60	9,166.59	9,344.18	9,482.42	9,575.31	9,762.91
-- Bulk Ice Cream	8,446.26	8,784.11	8,959.79	9,094.19	9,185.13	9,368.83
-- Ice Cream Desserts	386.34	382.48	384.39	388.24	390.18	394.08
- Take-Home Water Ice Cream	-	-	-	-	-	-
Ice Cream	13,047.20	13,738.62	14,036.26	14,421.27	14,654.26	15,045.10

APPENDIX 1B: SALES FORECAST

Forecast Sales of Ice Cream by Category: Volume 2010-2015

S$ million	2010	2011	2012	2013	2014	2015
Frozen Yoghurt	-	-	-	-	-	-
Ice Cream Parlours	39.98	41.65	42.93	43.98	45.06	46.16
Impulse Ice Cream	42.64	44.27	45.90	47.58	49.32	51.09
- Multi-Pack Dairy Ice Cream	18.27	20.19	22.10	24.09	26.14	28.23
- Multi-Pack Water Ice Cream	-	-	-	-	-	-
- Single Portion Dairy Ice Cream	21.81	21.64	21.44	21.23	21.00	20.74
- Single Portion Water Ice Cream	2.56	2.45	2.35	2.26	2.18	2.11
Retail Artisanal Ice Cream	-	-	-	-	-	-
Take-Home Ice Cream	70.50	71.14	71.71	72.22	72.66	73.04
- Take-Home Dairy Ice Cream	70.50	71.14	71.71	72.22	72.66	73.04
-- Bulk Ice Cream	66.10	66.76	67.36	67.90	68.38	68.79
-- Ice CreamDesserts	4.40	4.38	4.35	4.32	4.29	4.25
- Take-Home Water Ice Cream	-	-	-	-	-	-
Ice Cream	153.12	157.07	160.54	163.79	167.05	170.29

APPENDIX 1C: BRAND SHARES

 

Ice Cream Brand Shares 2006-2009

 

Brand	Company	2006	2007	2008	2009
Cornetto	Unilever Singapore Pte Ltd	18.08	18.61	19.15	20.16
Drumstick	Nestlé Singapore Pte Ltd	9.34	9.96	10.27	10.75
Magnolia	F&N Foods (S) Pte Ltd	7.77	8.02	8.75	7.97
Magnum	Unilever Singapore Pte Ltd	5.16	5.33	5.53	5.61
Häagen Dazs	General Mills Asia Pte Ltd	4.59	4.77	4.70	4.81
King's	King's Creameries (Singapore) Pte Ltd	3.82	3.83	3.77	3.80
Magic Cup	King's Creameries (Singapore) Pte Ltd	4.01	3.36	3.04	2.41
Fruiti	Unilever Singapore Pte Ltd	1.58	1.56	1.62	1.53
FairPrice	NTUC Fairprice Co-operative Pte Ltd	0.87	0.91	1.13	1.40
Cravio	F&N Foods (S) Pte Ltd	1.22	1.09	0.75	1.00
Cadbury's	Cadbury Singapore Pte Ltd	1.72	1.12	0.84	0.80
Crunch	Nestlé Singapore Pte Ltd	1.22	1.09	1.13	0.80
Traffic Light	Nestlé Singapore Pte Ltd	-	0.41	0.49	0.46
Carrefour	Carrefour Singapore Pte Ltd	0.17	0.18	0.19	0.20
Solero	Unilever Singapore Pte Ltd	0.71	0.67	-	-
Frutips	Nestlé Singapore Pte Ltd	0.47	-	-	-
Others	Others	39.26	39.07	38.65	38.29
Total	Total	100.00	100.00	100.00	100.00

APPENDIX 2: RECEIPTS

Price of Drumstick (Kit Kat) and Cornetto (Royale)

Price of Magnolia (Supremo)

APPENDIX 3: MAGAZINE SCANS

Magazine Scans from ‘Female’ and ‘Her World’ magazines.

APPENDIX 4: DIRECT EXPERIENCES

Magnum Double Caramel

‘Pleasure Suite’ and ‘Launch Event’ at Mandarin Gallery, Orchard Road.

(Images taken from Facebook: Magnum)

APPENDIX 5: MARKETERS PROMOTIONAL EFFORTS

Promotional advertisements and efforts by Marketers.

 

APPENDIX 6: POP DISPLAYS

In-Store Point of Purchase (POP) promotional display.

APPENDIX 7: COMPETITOR’S PRICING

In-Store displays of competitor, Häagen Dazs pricing.

APPENDIX 8: PRINT ADVERTISEMENTS

Print Advertisements of Magnum Double Caramel & Häagen Dazs.