Building the ice cream business in india(1)

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Building the Ice Cream Business in India-- Unilever By: Ajay Singh Bhargab Dhar Debajyoti Ghosh Debnath Ganguly Kushal Gayakwad Joydip Pati Manisha Bajaj Monika Raheja Pallab Ghosh Rajarshi Mitra

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Transcript of Building the ice cream business in india(1)

Page 1: Building the ice cream business in india(1)

Building the Ice Cream Business in India-- Unilever

By:Ajay SinghBhargab DharDebajyoti GhoshDebnath GangulyKushal GayakwadJoydip PatiManisha BajajMonika RahejaPallab GhoshRajarshi Mitra

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History

• HLL launched its international Walls range of ice creams in

India in the mid 1990s.

• HLL adopted a strategy of acquisitions of ice cream brands

and strategic tie ups with Indian groups to evolve its ice cream

business.

• The case deals with various marketing initiatives introduced

by HLL to create interest in the segment and expand the market.

Case HISTORY

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Marketing Strategy of HLL

STRATEGIC ALLIANCES

• Early 1990-Unilever entered food business through BBLIL.

• BBLIL acquired – kissan (UB Group) & Dollops(Cadbury)

• Mid 1990– Alliance Kwality Ice cream Group.

• 1995- Acquired marketing and distribution rights of Milkfood 100%.

• 1996- BBLIL merged with HLL.

All smaller brands were phased out and Kwality Walls emerged as

a Mother Brand.

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Product portfolioProduct Price (INR) Target Segment

Feast Range 15 Young generation with an attitude!

Cornetto Range 20-30 Young adults

Max Range 0.25-5 Solely children

Sundae Range 90+ Family, take-home, 10pm frozen desserts

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Consumer Analysis

• Consumption of ice cream per head was very low.

• Psychological factors.

• Ice cream eating at home was confined to special

occasions.

• Indian palette restricted to three flavors - Vanilla,

Chocolate and Butterscotch.

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Competitive Advantage

Seeking Competitive Advantage

Two types of analysis

• Industry Analysis – Porter’s Five Forces Model

• Comparative Analysis -- Structural and

Responsive Advantage

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Porter’s 5 Force analysis

Threat of Substitute:

• Threat of substitute is very high for ice creams in Indian market

due to its culture of traditional sweets and desserts.

Some of the substitutes are :

• Traditional sweets

• Home made desserts like Halwa and Kheer

• Kulfi or Faludas

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Porter’s 5 Force analysis

Bargaining power of Suppliers:

Bargaining power of suppliers is pretty low as

manufacturer can easily switch to a different

supplier at low cost

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Competitor Advantage

Comparative AnalysisSpecific advantage of competitors within a

given market.Two types:• Structural advantage• Responsive advantage

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Comparative Analysis• Structural Advantage–

Hll being a parent company is a huge advantage to kwality

walls

Manufacturing units are located across major cities in India

• Responsive Advantage—

Strong adaptability to the changing tastes of the

consumers (introduction of Foreign Flavors)

Unique value

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Opportunity & Threat Analysis

Opportunities

• In the early 2000s, the consumption of ice creams per

head in India was very low at 250 ml

• In 1997 Gov liberalized the rules for the ice cream

industry which resulted in a 15-20 % growth per annum

• Huge number of young population which is prevalent in

India

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Opportunity & Threat Analysis

Threats

• Powerful local players in the market (Top n Town very

popular in MP & UP, Cream Bell, Metro).

• Entry of the foreign brands like BR, McDonalds.

• Indian Sweets Market.

• Substitute products has a strong hold in the consumer

psyche of tier 2 and tier 3 cities.

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4 Phase Strategy by HLL

• Product innovation (Take home segment and

softy cones)

• Communication

• Activation & Visibility

• Distribution

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Softy Cones• HLL announced the launch of Softy kiosks for selling softy ice

creams in 2000

• The product was priced at Rs.5 per cone

• HLL pursued a different business model. The company

provided the Equipment, Training, Advertising and Quality

standards while the franchisee provided the Place and

Manpower

• Hygienic (No human contact)

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Strategic Changes in Softy Biz

• Problem: Higher investments 3 lakhs for machine and a

high priced mix.

• HLL reacted by introducing a softy machine worth Rs.I.5

lakh and products at various price points.

• Like a plain softy sold at Rs.7, a softy with a sauce

topping sold for Rs.12 and an addition of nuts made the

price Rs.17

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C Communication-Promotional Strategies

• Kwality walls used some excellent promotional

strategies to create its brand in the Indian market

• They promoted Kwality walls as an umbrella brand and

developed different brands under it like Cornetto and

Max

• Had different advertisement and promotion campaigns

to cater to its target market

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Promotional Campaigns

• May 2001 - What's on your stick?

• Valentine's Day (2001)-Cornetto Khao, Jodi Banao

• March 2002 to May 2002- Ek Din Ka Raja

• 2002- Fridge mein Kwality Walls hai kya

• 2003- Max The lion king, Bano Toonstar with Scooby Doo.

• 2003( Festive Season) Max Rocket and Max Chakri for kids and

Cornetto range and Pista Kulfi for Adults.

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Results-Resource Based View

• With superb promotional strategies they were able to create a

differentiated product image

• EKDR sales touched 1million customers.

• They were able to create an intangible resource for sustainable

Competitive Advantage i.e. Brand name.

• As tangible resources they had a great distribution network and

positive cash flows

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Superior Distribution

• Home delivery systems in Delhi, Chennai, Mumbai and

Hyderabad

• Strategic tie ups with Pizza Corners

• Exclusive parlors & DFO’s (now Swirls)

• Colorful ‘Trikes’ with Voltas cooling solutions helped HLL

to reach 900 towns by 2001 end and a quarter of sales

came from them

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Conclusion• Was able to create a brand through some excellent

Promotional Strategies.

• Concentrated on quality of their products to retain

their brand value.

• Were able to create a sustainable cost advantage with

low cost freezing units and softy kiosks.

• Were able to connect with Indian consumer psyche

and gain their affection.

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Recommendations

• They have to tap the Tier 2 and Tier 3 cities, which has great

potential.

• Can create a new relatively low priced umbrella brand to tap the

rural market.

• Promotional campaigns to fight against their Substitutes like

Sweets and chocolates.

• Can have more Indian flavors in 15- 20 Rs segment.

• Introduce “Falooda” Cups.