A) Sweden
B) Denmark
C) Norway
D) America
Don't let the name fool you, Häagen-Dazs is actually an American brand! According to wikipedia, its simply a combination of two made-up words to look Scandinavian! Yes the words are made-up! Theres no such word in any language.
Okay so right now you're asking whats the relevance of this to economics?
Well...I'll try to bring in economic concepts as we go along.
Firstly, this smart technique which Häagen-Dazs used is called Foreign Branding in the marketing industry. From Wikipedia: "Foreign branding is an advertising and marketing term describing the implied cachet or superiority of domestic products with a foreign or foreign-sounding name. In English-speaking countries, many cosmetics and fashion brands use French or Italian-styled names to imply a connection to the style-conscious. Food and drink items also use French or Italian names, trading on the high reputation of France in these areas." This advertising technique can actually increase demand for the good since people have a false impression that these products with 'cheem' brand names are actually of superior quality. I thought this was quite interesting because its surprisingly true, and it shows how people can sometimes be gullible enough to fall for 'cheem-sounding' foreign names, even though they're just made-up.
Besides that, another reason why Häagen-Dazs is so successful because it caters to a different market. If you realised, before Häagen-Daz, all ice-cream brands were targeted at little children, with cute animals, colourful designs and even cuter names like 'Paddlepop'. However, Häagen-Daz chose to target the adults. They presented ice-cream in style and class. They're the 'super-premium' brand, attracting the upper class people. And well, its quite a smart move because in the end the people with more money in their pockets are the adults and not the children.
This two factors combined, smart advertising strategy and creation of a new market (of selling ice cream to adults), has resulted in the great success of Häagen-Daz. This brand differentiation has made demand for Häagen-Daz products price inelastic. Although there are many substitutes for ice cream (magnolia, movenpick, nestle, etc), there are no close substitutes for Häagen-Dazs' "premium-class" ice cream. There are also few other ice-cream brands that adopt a restaurant style to sell their products. Maybe only Swensen's and Ben & Jerry's, but these two brands don't come close to beating the "high-classness" of Häagen-Dazs. haha. Thus, even though Häagen-Daz charges desserts at really high prices compared to the ice cream man who parks outside the hci high school bus stop, it can and will still survive because its demand is price inelastic.
Besides that, another reason why Häagen-Dazs is so successful because it caters to a different market. If you realised, before Häagen-Daz, all ice-cream brands were targeted at little children, with cute animals, colourful designs and even cuter names like 'Paddlepop'. However, Häagen-Daz chose to target the adults. They presented ice-cream in style and class. They're the 'super-premium' brand, attracting the upper class people. And well, its quite a smart move because in the end the people with more money in their pockets are the adults and not the children.
This two factors combined, smart advertising strategy and creation of a new market (of selling ice cream to adults), has resulted in the great success of Häagen-Daz. This brand differentiation has made demand for Häagen-Daz products price inelastic. Although there are many substitutes for ice cream (magnolia, movenpick, nestle, etc), there are no close substitutes for Häagen-Dazs' "premium-class" ice cream. There are also few other ice-cream brands that adopt a restaurant style to sell their products. Maybe only Swensen's and Ben & Jerry's, but these two brands don't come close to beating the "high-classness" of Häagen-Dazs. haha. Thus, even though Häagen-Daz charges desserts at really high prices compared to the ice cream man who parks outside the hci high school bus stop, it can and will still survive because its demand is price inelastic.
Alright... I tried to bring in as many economic concepts as possible. I know this is not a brilliant post but I just wanted to share it anyways because I think its really interesting to understand why some brands can achieve such high successes while others can't. I didn't exactly do an article review because I couldn't find a good article on Häagen-Daz. So I just did my 'evaluation' here. Hope you guys find it interesting! Feel free to response or critique or refute...haha
Eileen :)
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