What is Iceland’s market segmentation strategy?
Is it only mums who go to Iceland?
Before you read this post, take a moment to think over what you know about Iceland – the British supermarket chain that specialises in frozen food.
Who fits the profile of a typical Iceland customer? Does the company target these individuals effectively? If you live in the UK or have spent much time watching TV commercials, you’ll probably recognise the slogan “Mum’s gone to Iceland” (which later became “That’s why mums go to Iceland” in their ad campaign featuring former girl group singer Kerry Katona). This supermarket, it claimed, was the place to go for busy mothers with little time to cook from scratch. Making the most of economic benefits of the frozen food, Iceland passed these savings on to customers, making it an attractive proposition for families living on a tight budget.
Though at times Iceland did promote their more pricey lines, especially at Christmas time, the supermarket clearly targetted people wanting decent food at lower prices.
But did you know that Iceland also makes claims about its products from more health-orientated and environmental perspectives? A quick internet search will lead you to a page on the company’s websites where they detail the benefits of frozen food. They also carved out a niche for themselves in 1998, when the amount of genetically modified organisms that were actually being used in a lot of food production became a story in the news. Iceland became one of the first supermarkets to ban GMOs from its own-brand products. Clearly, this is a chain that wants to set itself out as a conscientious food retailer.
Even as recently as last year, Iceland were positioning themselves as a more environmentally-friendly alternative to their main competitors when in April they announced they were removing palm oil from their lines in-store by the end of 2018. And the company caused a stir when it teamed up with Greenpeace to produce a Christmas ad campaign highlighting the devastation caused by palm oil farming in the rainforest. The ad — featuring a voiceover by actress Emma Thompson and a cartoon orang-utan, one of the animals directly affected by palm oil farming-related habitat destruction — was banned from being shown on British television as it was deemed too political. Nonetheless, the subsequent social media discussion, breakfast TV and news interviews garnered Iceland a lot of attention, even if the advert itself wouldn’t appear on people’s screens at home. The company posted the ad to its YouTube channel, where it has gone on to clock up nearly 6 million views.
So the question is who is Iceland now targetting with its marketing campaign? Is it the place for budget shoppers to go and get their burgers? Or is it more for customers who are more socially and environmentally aware? Given the overt gender stereotyping associated with the “Mum’s gone to Iceland” slogan, perhaps going with Rang-Utan and the palm oil plight is the best move for the supermarket chain. What do you think?
