The Situation Trends

The market trends for ice cream products are changing. The changing demographic structures particularly in the developed world are resulting in populations with fewer children while the number of adults has significantly increased. Traditionally, ice cream products are considered to be for children. Thus, with the changing demographic structures, it implies that the traditional market for ice cream is shrinking. Manufacturers of the product, such as Unilever, are facing the challenge of losing out on their profitability unless they seek for alternative ways of reinventing the market and maintain a steady growth.

Problems

Purchasing decision process of consumers

Industry players are faced with the problem of transforming the purchasing decision process by consumers. Although adults can make a bigger and even better market for ice cream products, industry players such as Unilever are facing the challenge of transforming this potential market to being real.

The initial stage in a consumer’s purchase decision making process often begins with the recognition of a problem. This is referred to as need recognition. Unilever has to develop this among the adult potential market so as to create the market. This will consequently result in the potential consumers looking for information about the right product. They will evaluate available alternatives as they seek for value for their money before making the final purchase decision.

After making the purchase, the consumers must still find value in the product in order to be able to make repeat buying.

Key Competitive Forces

The ice cream market comprises of various players all of whom are targeting the same customers. The higher the number of loyal customers a manufacturer can have, the higher the chances of profitability. Thus, Unilever has to ensure that it builds its competitive capabilities in order to enhance its competitive advantage in the market. Unilever can enhance its competitive capabilities by seeking to block new entrants from joining the industry. This can be achieved through investing heavily on the assets in order to benefit from economies of scale. The company must ensure that its Magnum brand of ice cream contains more value than that of competitors in order to limit the chances of consumers switching between manufacturers. In other words, the quality of Magnum has to be superior as compared to other rival brands of ice cream. The existing distribution channels need to be increased in each of the markets where Unilever operates in order to reduce competitor’s power of influencing market trends. The power of industry suppliers also needs to be reduced by Unilever. The company needs to initiate forward integration in its operations so as to limit the power of influence from suppliers which other competitors face.

Alternative Solutions

Marketing Mix

Some marketing mix factors can be manipulated to provide amicable solution to the challenges facing Unilever. These factors include product, price, place, promotion, and place. In terms of product, Unilever has to ensure that Magnum contains product values with a strong marketing appeal to ward off any competition from rivals. This may include the addition of ingredients, improved packaging, change of shape and size, and addition of new features such as wooden handle.

Price can reflect on the product quality and characteristics. It can communicate the total value added in the product. Unilever can set a price that factors in the costs incurred in adding value to the products, as well as the new packaging cost and the profit margin for the company.

Promotional activities can also be increased mainly through advertisements and sponsorship of social activities. This will create wider market awareness and increase profitability for the company. Promotional activities can be conducted in all places or locations but after considering the appropriate channels for each location. Mass media channels such as radio, TV, and newspapers will be effective as their coverage is wide.

Channel Strategy

Unilever can seek to build a sales channel for its Magnum brand of ice cream. This will involve working with intermediaries whose main objective will be to ensure that ice cream is sold through the channel layers, with the ultimate goal of reaching the consumer. A product channel can also be developed where different intermediaries will be established to physically get involved in handling the product as it moves from Unilever to consumers in the market. A service channel can equally be established in which case entities providing essential services can support the launch of the Magnum ice cream brand during its movement through the numerous sales channels until after the customer has finally purchased the product (Urde, 1999, p. 117).

Identification of Partners

A micro channel of strategy would be most appropriate for the case of Unilever’s Magnum brand of ice cream. This is because this is a comparatively low-tech commodity. Much attention and focus of the company should be put on price, where the company will be pursuing efficiency as well as cost controls in order to outbid its rivals. However much the Magnum ice cream brand will be of the right price, it will be difficult to realise sales unless the potential buyers are made aware of it, as well as presented with the product within their convenient reach. Thus, it will be of significant importance if the company indulged in promotional and placement activities.

Conclusion

Unilever is facing a marketing challenge for its ice cream product. The market trends are changing as a result of the changes of demographic structures for markets in the developed world. The population of children is decreasing while adult populations are increasing. Ice cream products are considered to be mainly for children and; therefore, the company has to seek for alternatives to sustain the market. Alternative options include influencing purchasing decision process for adults so as to create the need in them. The company can also build and enhance competitive advantages in order to ward off competition from rivals. The use of the marketing mix will effectively manipulate price, product, promotion, and place in order to enhance market performance for the product. A channel strategy would enable the company ensure its products are continuously provided into the market in order to eliminate chances of shortages and further enhance the likelihood of higher profitability.