Magnum is an ice cream brand owned by the British/Dutch Unilever company and sold as part of the Heart brand line of products in most countries.

PRICING STRATEGIES

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.