MARKETING PLAN HICO

MARKETING PLAN HICO

lAHORE SCHOOL OF ECONOMICSMARKETING PLAN HICO

Submitted toMs. Tania HassanSubmitted byAmal TahirAnum KhanZohaib TahirM. Usamah BukshiAhmed Habib MalikM. Maarij TahirAsad Ullah KhanThis report sheds light on the reasons behind the decreasing sales of HICO in Pakistan, and marketing plan of HICO.

Table of ContentsHAPPY ICE-CREAM COMPANY-AN INTRODUCTION5Proposed Mission Statement of HICO6INDUSTRY OVERVIEW6History of the Ice-cream Industry7Technological Advancements9Trends and Needs10Hot Weather and Need for Cold Desserts and Beverages10Increased Advertisements10Involvement of Children and Teenagers in Purchase Decision10Increasing Trend of Dining Out10PORTERS FIVE FORCES10Threat of Intense Segment Rivalry11Threat of New Entrants11Threat of Substitute Products11Threat of Buyers Growing Bargaining Power11Threat of Suppliers Growing Bargaining Power12PESTLE ANALYSIS12Political Factors12Economic Factors13Social Factors14Technological Factors16Legal Factors17Environment Factors17SWOT ANALYSIS19Strengths19Weaknesses20Opportunities21Threats22PORTERS GENERIC STRATEGIES24Differentiation24Product Life Cycle26Market Research27Segmentation29Geographic Segmentation30Demographic Segmentation30Psychographic Segmentation31Defining the target market segment35Level of Segmentation35Positioning of HICO361.Determining a Competitive Frame of Reference36Identifying Competitors36Analyzing Competitors362.Identifying Optimal Points-of-Difference and Points-of-Parity37Points-of-Difference37Points-of-Parity37Brand Mantras38Positioning38Establishing the Brand Positioning:40Differentiation Strategies1Product Differentiation2Consistency in Quality Differentiation2Service Differentiation3Image Differentiation3Branding Strategy4The Product Strategy7Product Classification7To Differentiate the Product7Ingredient Branding8The Product8Labeling Definitions8Quality Segments9Packaging10Pricing10Reference pricing11Price Quality inferences11Pricing objective12Placement13Marketing Channel System13Consumer and industrial marketing channel level13Pull Marketing Strategy13Selective Distribution14Marketing Communicating Mix15Advertising15Broadcast Media15Print Media15Digital Media16Display Media16Sales Promotion17Events and Experiences17BIBLIOGRAPHY19Appendices20Appendix 121Appendix 122

MARKETING PLAN HICO

MARKETING PLAN HICO

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HAPPY ICE-CREAM COMPANY-AN INTRODUCTIONHICO Ice-cream Company operates in the Frozen Desert and Ice-cream industry. HICO started its operations in Pakistan in 1956 and has the privilege of being the first industrial ice-cream producer in Pakistan. The manufacturing plant of HICO is located in Lahore, Pakistan. It was the first company to introduce the concept of selling ice-creams on trikes in Pakistan. In 1976, Mr. Inam Elahi who was a 7up bottler obtained HICO as part of the deal to acquire Coco-Cola Bottling plant. It is now handled by Pakistan Fruit Juice Company Private Limited. The parent company Pakistan Fruit Juice Company Private Limited is now involved in the production and marketing of beverages, ice-creams, rice and fruit juices. HICO was mainly sold on trikes outside schools, while some shops were also provided with the ice-creams. At many points during the operations, Mr. Inam Elahi was faced with the dilemma of closing HICO, as it was not contributing much to the revenue stream of the parent company. But Mr. Inam Elahi decided to continue the operations and he realized that expanding the geographical regions served and reorganizing the business was the only way to survive in the market. Around the same time, it was rumored that Walls was entering the Pakistani Market, so the management of HICO decided to expand its manufacturing capacity. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)In 1992, the manufacturing capacity was increased to 300 liters per hours and also distributed freezers in the retail outlets in Lahore. When Walls was introduced in Pakistan, the demand for ice-cream increased due to the marketing efforts of Walls. It benefitted HICO as well as the demand for HICO ice-cream increased as well, and they did not have to spend a lot on the marketing activities to sell the enhanced production. In 1996, HICO further increased its capacity to 600 liters and to 3600 liters in 1997. It was an important turning point for the company, as the company enhanced its target market to include Multan, Islamabad, Faisalabad, Peshawar, Gujrat, Gujranwala, Sialkot and Kharian in addition to Lahore. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)When the plant was acquired, it had a production capacity of 80 liters per hours and was only sold in 3-4 outlets. Now, HICO has an annual production capacity of 9 Million liters. Moreover, it has distributed around 8,000 freezers in the major retail shops. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)Furthermore the company has gone into backward integration and owns a dairy farm. The farm houses approx. 200 cattle which are used to provide fresh cream and milk. HICO is a bureaucratic organization. Formal structures exist in this company. Decisions about company policy, personnel decisions and financial objectives are made by the director himself. So a typical seth culture exists. HICO does not believe in Bank borrowing and thus they do not have any debt. Pakistan Fruit Juice Company and its divisions are all independent and cross borrowing is also not allowed between the divisions. (Ahmed, 2014)HICO mainly focuses on the expensive take home ice-cream category and generates higher margins. The product portfolio of HICO includes impulse articles, take home ice-creams, and larger party packs. The company does not have any distributors. HICO drives it sales from both the retailers (90%) and the hotels and restaurants (10%). Moreover, the company lacks a mission statement. Proposed Mission Statement of HICOWe will continuously strive to provide the best quality modern as well as traditional flavors of dairy ice-cream to the ice-cream lovers in the Pakistani Market, with the management philosophy that holds quality above profits, while providing conducive working environment to the employees and to promote good corporate citizenship behavior in Pakistan.INDUSTRY OVERVIEWPakistan has seen a huge growth in the ice-cream industry since independence. The entry of two multinational companies i.e. Walls and Omore have created increased demand for ice-cream and frozen desserts due to their heavy expenditure on marketing activities. For the five year time period 2004 to 2009, the ice-cream industry has grown by a compound annual growth rate of 6.6% per year. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012) The Ice-cream Industry involves many players ranging from large scale ice-cream manufactures to the ice-cream parlors. Ice-cream Industry of Pakistan includes some giants like Walls by Unilever and Omore by Engro Group. In addition to this, there are some small ice-cream manufactures that cater to the needs of a few cities of Pakistan like Happy Ice-cream Company, Igloo Ice-cream, Rocco Ice-cream and Yummy Ice-cream etc. Moreover, there are many ice-cream parlors now operating in the metropolitan cities of Pakistan. In addition to this, many bakeries operating in the country have also started their own ice-creams like Gourmet Bakers, DOCE Bakers and Butt Bakers are also manufacturing ice-creams. History of the Ice-cream IndustryHICO Ice-cream is the pioneer ice-cream manufacturer in Pakistan, which started operations in 1952. HICO Ice-cream is a product of Pakistan Fruit Juice Company Private Limited. HICO Ice-cream manufacturing facility is located in Lahore, and caters some of the major metropolitan cities of Pakistan. HICO was the first ice-cream company to introduce the concept of trikes in Pakistan and continued this sales strategy till 1990, at which point it made ice-creams available in the grocery stores. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)Polka Ice-cream Company was introduced in 1970, which was a big national player. Polka was a brand that was sold and distributed all over Pakistan. Polka was the trend setter in the industry of providing freezers to the retailers against a security and also started paying commissions to retailers for stocking and selling the Polka ice-creams. Moreover, the retailers were also paid so that the electricity costs could be covered. The mode of advertising used by these ice-cream manufacturers was radio advertisement while television advertisement was also used infrequently. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)Later in 1974, Igloo Ice-cream was introduced which is a brand of Orient Textile Mills. Igloo Ice-cream has manufacturing facility in Karachi and has a vast distribution network covering a large area of Balochistan and Sindh. Yummy Ice-cream and Rocoo Ice-cream were introduced in Pakistan in 1981. Rocco Ice-cream has manufacturing facility in Islamabad and serves these cities. Rocoo Ice-cream also established a network of freezers in around 1,000-1,200 outlets, and followed the same strategy as Polka. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)Until the early 1990s, there were only a few ice-cream manufacturers in Pakistan i.e. Igloo, Polka, Yummy, Rocco and HICO. In 1995, Walls was introduced in Pakistan, which changed the whole dynamics of the Ice-cream industry in Pakistan. Walls is a brand of Unilever and is sold in almost 40 countries worldwide. Walls being an international brand, having all the resources, started giving tough competition to all the other ice-cream manufactures of Pakistan. In 1994, Lever Brothers tried to acquire Polka Ice-cream for PKR 600 Million, but the bid was rejected by Polka as they demanded PKR 1 billion. But later Polka approached Lever Brothers to merge the two companies and the two companies were successfully merged in May 1999. Due to the vast financial resources, vast distribution network, and marketing capabilities, the market share of Walls increased dramatically in Pakistan. Unlike the other players in the industry, Walls started giving freezers to the retailers for free. Today Walls is the leader in the frozen desert and ice-creams. Another trend that started in this era was the ice-cream parlors. Many famous Ice-cream Parlors entered the metropolitan cities like Lahore, Karachi, and Islamabad etc. Some of the famous names include Hot Spot, Gelato Affairs, Marble Stone etc. Omore, a subsidiary of Engro was launched in 2009. The market share of Omore also increased significantly due to its intensive marketing efforts. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)Ice-cream ManufacturersYear of Inception

Happy Ice-cream Company1952

Polka1970

Igloo1974

Rocoo1981

Yummy1981

Walls 1995

Omore2009

Ice-cream is a convenience good as people buy it often and keep a stock in their freezers especially in the summers. They enjoy ice-cream with family and friends. HICO ice-cream falls into the category of convenience goods and is bought often by the customers as it is available at some of the leading stores in the town. The brand name is also well known and popular among the consumers in Lahore. As HICO is classified as a convenience good, therefore, its marketing team has to create brand recognition and awareness among customers on a high level to gain their attention. HICO should make its product readily available at all general stores like walls to gain better market share because availability is the basic requirement for a convenience good to be sold. It should use catchy slogans and mass advertising to reach the consumers. HICO can add sales promotions and coupons to raise its sales. To earn higher profits, HICO will have to sell in large volumes to a large market. Technological AdvancementsThere has been huge advancement in the ice-cream industry. All the ice-cream manufactures started supplying the retailers with the freezers for keeping their freezers. Ice-cream cant be stored in the normal household freezers, but have to be stored in special freezers which need to maintain the temperature between -18 degrees Celsius to -26 degrees Celsius. These freezers are more costly as compared to the ordinary freezers. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)Moreover, due to the increased load shedding in the country, the ice-cream freezers could not store ice-creams for a longer period of time. This resulted in the melting of ice-cream, which could not be sold. Therefore, the ice-cream manufacturers brought the eutectic freezers, which were specifically designed for use where there are long energy outages to avoid the spoilage of ice-creams. These freezers have eutectic solution in the walls of the freezers, which can maintain temperature for long durations of energy outages. (Friz Tech Refrigerators)Moreover, the trucks used to transport ice-creams are having the same technology. These trucks can be charged overnight when the truck is parked with a compressor. The next day, the ice-creams can be delivered without spoilage because the walls of the trucks have the same eutectic solution. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)Trends and Needs Hot Weather and Need for Cold Desserts and BeveragesThe weather in Pakistan is hot for more than half a year. In this hot weather, the demand for ice-creams increase significantly. Apart from that, due to the increased advertisements that promote eating ice-creams in the cold weather has also resulted in increased demand for ice-creams even in the winters. Increased AdvertisementsThe ice-cream eating trends have changed tremendously over the past few years, because of the increased advertisements in the television. These advertisements have caused increased awareness of the new products offered by the ice-cream manufactures; thus directing the sales of ice-cream up. Involvement of Children and Teenagers in Purchase DecisionAdvertisements are increasingly targeted towards children and teenagers. This has changed the way the purchases are made. Previously, only the earners in the family made the purchase decision, but now the children and teenagers are equally involved and their opinion also matters in the purchase of products. Therefore, an important trend is the increasing involvement of children and teenagers in the purchase process. It is because of this trend, that Walls directly targets children in the advertisement for Paddle Pop etc. Similarly, Walls targets teenagers in most of its advertisement for Cornetto. Increasing Trend of Dining OutThere is also an increasing trend towards dining out. It is because of this new trend, that many new ice-cream parlors have now started operations. Having a dessert after lunch or dinner, has become a new trend. People love to go out to eat ice-cream with their friends and families. PORTERS FIVE FORCESThe competition that results from all the five forces lumped together dictates the structure of an industry and governs the nature of competitive interaction within the industry. A lot of factors can affect the industry profitability in the short run but the five forces set the industry profitability in the medium and long run. Threat of Intense Segment RivalryThe ice-cream industry contains strong competitors like Walls and Omore and other brands small competitors like Yummy and Igloo. The industry already faces advertising battles and new product introductions by Walls and Omore. Walls being the market leader has a market share of 60% and Omore being the challenger has a market share of 16%. Threat of New EntrantsThe industry faces high entry and high exit barriers. With giants like Walls and Omore already operating in the industry, new entrants will need to spend huge amounts on marketing and advertising strategies to gain a market share. The economies at scale in manufacturing, distribution costs, and marketing at the national level make it very difficult for start-up companies to enter into the national market. There are substantial costs in raising the capital needed to build manufacturing facilities that can mass-produce at the national level. Also, the costs of packaging and storing goods such as ice-cream, at a mass level can generate high costs. High fixed costs incurred at the time of entry reflect high exit barriers. Threat of Substitute ProductsThe number of substitutes being offered by Walls, Omore, etc is already high. This places a limit on prices and profits. HICO needs to take advantage of technological innovations and changing consumer tastes and in order to reap profits it needs to capitalize on these changing trends. Threat of Buyers Growing Bargaining PowerInflation is on the rise which has led to a decrease in purchasing power, thus consumers are likely to be affected by price changes. Whenever a buyers disposable income declines, they are more likely to purchase cheaper brands, and if a buyers disposable income increases, then they are more likely to buy more expensive brands. Likewise a decrease in disposable income causes buyers to shift to impulse articles and an increase in income causes them to rely more on family packs. Since HICO derives most of its revenue from its take home category thus it is likely to be affected with a decrease in disposable income (economic downturn).Consumers have become more health conscious over the years and dont compromise on quality. They want quality products. Using vegetable oil instead of pure dairy products in ice-cream production can lead to an increase in bargaining power of buyers. Threat of Suppliers Growing Bargaining PowerMilk being the basic ingredient required for ice-cream production leads to high competition among suppliers. There are no substitutes available for milk and being the most important input leads to an increase in suppliers bargaining power. PESTLE ANALYSISPESTLE analysis is a useful technique to analyze the macroeconomic environment that impacts an industry. It helps in the identification of opportunities presented and the threats posed by the external environment. Political FactorsThe political factor of PESTLE deals with the effects of government policy; the decisions made by the governments and the policies they develop for governing the markets or the industries that are contributing to the economy of the country. It includes the extent of government direct and indirect intervention in the business, thus affecting the way a business operates. Other political factors include the tax policy, trade restrictions, tariffs, incentives etc. (Chidi, Oluwalaiye, & Okwu, 2011)Electricity is a critical factor in running machinery in factories and industrial units. The industries in Pakistan do not get uninterrupted supply of electricity, due to which all the industries are facing problems in production. All the industries are badly impacted by this and the ice-cream industry of Pakistan is no exception. There is a huge gap between the demand and supply of electricity and the governments effort to fill this gap are negligible. (Islamabad Chamber of Commerce & Industry) Under these circumstances, the ice-cream industry does not only have to employ expensive sources of energy but also faces losses due to spoilage of ice-cream. Apart from that, ice-creams have a GST of 17% on an average due to this; the companies have to increase their prices. Moreover, there are not many incentives available to the ice-cream industry by the Government of Pakistan which would encourage investors to invest in this sector.Pakistan is characterized by political instability. The violent and unstable environment results in uncertainty which does not allow the businesses to work efficiently in the country as seen in case of KPK where the terrorist attacks have been at its greatest frequency during the last decade which has had a nationwide impact thus affecting individual business units. Ice-cream is one of the products that people enjoy eating at outdoor locations like malls, parks, after meal, etc. but political instability and terrorist attacks have forced people to stay at home instead of going out for leisure time. So, it has disturbed household activities of consumers and now they prefer to stay at home and this has indirectly affected sales volume of ice-cream producers. Also, the political instability does not incentivize investors to invest in Pakistan.Economic FactorsThe economic situation includes the income distribution and consumption patterns. The available purchasing power in an economy depends on current income, prices, savings and credit availability. Consumer purchasing power is impacted by the inflationary trend in the economy, hardening interest rates making credits expensive and the fear of an impending recession.Changes in the wider economy impact businesses. The economic situation in Pakistan has been worsening for the last few years, which directly affects businesses operating in a country. Expansions and other investment opportunities have fallen greatly because of instability and other terrorism issues. In 200809, the economy went into a recession. This had a negative impact on the industry. During this period unemployment increased. Even employed people felt the effects of the recession. Many employers were forced to cut their wages or to keep pay raises very low which led to a decrease in disposable income. Moreover, due to political instability that is linked with economic stability (stability or instability) and war against terrorism the economic condition of the country has deteriorated and deprived the economy from money. All this has led to a huge risk to the continued existence of the daily businesses and hence reduces the buying power of a normal man. Another important economic factor that has affected the consumer buyer behavior is the rising prices in the country. Due to inflation, the purchasing power of the consumers has decreased; this has impacted the sales of extravagances like ice-creams and other sweets. Following table shows the inflation rates in Pakistan from October 2013 to April 2014. (Trading Economics)The prices are increasing, which has impacted not only the consumers but the producers as well. For the consumers, the prices have gone up, whereas for the producers the prices of the raw materials have risen, thus increasing the costs and lowering the profit margins, if prices of end products are not increased accordingly.Table 1: Inflation Rate in PakistanMonth and YearInflation Rate in Pakistan

October 20139.08%

November 201310.9%

December 20139.18%

January 20147.91%

February 20147.93%

March 20148.53%

April 20149.18%

Source: Trading EconomicsIn business, the term margin relates to the amount of profit that a business makes on sales. During the recession, fortunately, the margins on services such as ice-cream remained stable. Another important economic influence on a business is the level of competition in the industry. In the frozen food industry, there has been an increase in competition. Social FactorsPakistan is the home to almost 180.44 Million people (2013). The population of Pakistan is expected to increase, which can be mainly attributed to the high birth rate and low mortality rate. According to an estimate, the population of Pakistan will increase to 234.158 Million by 2013. (World Population Statistics, 2013).36% of the population lives in urban areas with a per capita income of USD 125,424 and the bulk of production of ice-cream goes to these urban centers. There has been an increase in disposable income within the growing urban middle class. According to an estimate in 2002, about 6.8 million of the 50 million people living in urban Pakistan belonged to the upper and uppermiddle class, representing a grocery market worth USD 1.7 billion. Thus, with the increased disposable income and increased number of people migrating to the urban areas, the ice-cream market is expanding.Pakistan is a country that is enjoying consumer boom for over a decade now. When we go back to the nineties, in Lahore there were two ice-cream parlors mainly Polka Parlor and Yummys 36. Since then the ice-cream market has evolved to a great extent. Brands like Walls and Omore have stepped in, also frozen yogurt outlets available in many areas which has changed the whole dynamics of the ice-cream market. There is an increased trend of dining out now, which has resulted in increased sales of ice-creams sold in ice-cream parlors.Not only the ice-cream market has evolved but new consumer needs and wants have surfaced. In the eighties there were just three visible brands HICO, Polka and Igloo. Kulfi and ice gola were available on trikes outside schools but now during summers we only hear the trikes playing advertisement jingles of Omore and Walls. Thus, consumers awareness has improved over the years. Even the rural class now has ice-cream instead of sweetened curd. The SEC A and B now enjoys availability of international brands like Baskin Robbins. Moreover, people have become more health conscious and quality is a major determinant in buying any food product. Due to this, people prefer ice-cream made from pure milk and yogurt. Previously, ice-cream was only eaten in summers when the weather is hot, but due to increased advertisement people eat ice-cream in the winters as well, which has resulted in increased sales of ice-cream.Retailing in Pakistan is mainly confined to kiryana stores, which are run by smaller, less educated entrepreneurs. The kiryana store is very small in size and carries very limited product lines/brands. It is usually located in densely populated urban areas. Each locality may have a number of kiryana stores. There is usually enough space for only one freezer. Thus with the advent of increasing per capita income, consumerism and rampant advertisement the tastes and exposure of people has evolved towards ice-cream. Another social trend is the increased involvement and say of the children in the whole buying process, which is because of the fact that marketers are increasingly focusing advertisements to children and youngsters. As ice-cream on the sticks is an impulse article, the companies are now targeting youngsters in their TV commercials. Thus children now go for ice-creams which are readily available around the corner. Long gone are the days when mothers use to make jellies for their children. Thus the tastes have drastically evolved. The major chunk of revenues of Walls and Omore comes from impulse articles (ice-cream available on sticks) and this can also be linked to the fact that more than 50% of the population in Pakistan is comprised of youth.The tastes are also affected by our culture as people here in Pakistan enjoy creamy and thick ice-cream. Thats evident from the fact that most elder people prefer kulfi flavor as opposed to other new flavors. But the youngsters as they are more exposed to the advertisements and the changing environment prefer newer flavors like oreo and blue berry.Technological FactorsTechnological advancement is very rapid in the current world. Technology plays an important role in any economy as it helps to compete within an industry and even with other industries in the economy. The technological factors include the rates of obsolescence, that is, the speed with which new technological discoveries supersede established technologies. It also includes new inventions as it might result in entering in new markets and in new businesses around the globe.There has not been much technological advancement in the ice-cream industry except for the increased manufacturing capacity of the companies. However, a major technological change is the introduction of the eutectic freezers which are placed in the stores. Due to increased load shedding, ice-cream industry had to bring in new freezer which could keep the ice-cream cold even in the absence of electricity for up to many hours. The same technology is adopted in the ice-cream trucks to transport ice-cream. The walls of the freezers and trucks have eutectic fluid in them, which can maintain temperature for long durations of energy outages. Thus, it prevents the spoilage of ice-cream. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)Legal FactorsPakistan is a country where law enforcement and legal bodies are not working properly due to economic instability, political issues and weak regulatory authorities. In such an environment companies tend to take advantage of manipulating their products due to lack of legal bindings since there is no check and balance and nor do the companys focus on consumer rights. Inefficient and ineffective judicial framework also affects sales of various companies. Though the legal environment has improved but the fact that the economy is being run by corrupt leaders, the fear still remains there.However, there are a few regulations on the ice-cream industry, which include the Food Hygiene Regulation of 2006, Ice-cream Heat Treatment Law, etc. According to the Ice-cream Heat Treatment regulation 1959 and Dairy Products Regulation of 1995, all the ice-cream sold in the country must be subjected to heat treatment.(Agri Hunt)Moreover, company registrations and listings also have an impact on the sales of local producers like HICO ice-cream.Environment FactorsWith an increase in load shedding, reliance on private generators has increased for electricity generation, which has not only led to an increase in cost for the companies but also as a source of damage to the environment in terms of a high carbon foot print.

SWOT ANALYSISSWOT Analysis is a useful technique which is used to understand both the external as well as the internal factors that impact an organization. The internal factors that affect an organization include the strengths and weaknesses of the organization, whereas the external factors include the opportunities and threats presented by the external environment of an organization.StrengthsHICO has been in the ice-cream industry for a long period of time and it has enabled it to have certain advantages over its competitors. Some of the strengths of HICO are as follows:1. HICO is one of the oldest national companies operating in Pakistan that provides pure dairy ice-cream made of milk and butter as compared to their major competitors such as Walls and Omore, which use vegetable oil in their frozen dessert products. This gives HICO an edge over its competitors and also support for their consumer base by providing a quality product. 2. HICO exhibits highest brand loyalty. The companys research proves the fact that if a consumer buys and consumes HICO ice-cream then he wont buy and consume any other ice-cream. Consumers will definitely recommend HICO ice-cream to others. With such high brand loyalty HICO can easily increase prices with the confidence that consumers wont switch to other brands. 3. HICO generates almost 70% of its revenues from its TAKE HOME articles and is a market leader in this particular category. 4. HICO continues to follow its heritage of delivering customer value. They continue to supply their stock keeping units to huge buyers such as Avari, Gym Khana, Heera 36, Freddies Caf, etc. This has resulted in a loyal customer base. 5. HICO also caters the untapped market segment of consumers who are suffering from diabetes and obesity. It is the only producer in the industry which produces diet products, which is also strength of the company as they are serving a segment of the market that is not yet served by any of its competitor.6. Another key strength of HICO is its unique flavors that it offers now. Although most of the flavors are now in markets with other competitors like Praline by Gourment Chocolate Chip by Walls and Omore but still there are few flavors that are specifically part of HICO like Chocolate Fudge, Blueberry etc. It shows the broad flavor range that HICO provides to its consumers as its strength. It also uses co-branding strategy with OREO. 7. They totally rely on their internal growth in order to generate profits which basically provide the firm with a footing in the market and holding a market share. This is primarily achieved through unique value added products to their customers. Customer loyalty is also achieved through slow growth and market penetration thus satisfying their customers through their taste, flavors and other features like quality and value added products. 8. HICO generates high profitability per freezer as compared to Walls and Omore mainly because it concentrates on TAKE HOME articles as opposed to Walls and Omore, which concentrate on generating almost 80% of their revenue from IMPULSE articles. 9. The milk that is used to manufacture ice-cream is obtained from their own farms which helps to keep costs to a minimum. Moreover, there are no intermediaries involved in the distribution channel which also keeps an advantage of cost cutting. (Ahmed, 2014)WeaknessesDespite being a part of the frozen-food industry for a long time, HICO still needs improvement in certain areas. Some weaknesses which HICO needs to overcome are as follows:1. The primary weakness of the brand is low growth from IMPULSE articles that require mass marketing. The market is already occupied by Walls and Omore for this particular category. HICO only generates approximately 5% of its revenues from IMPULSE articles as opposed to Walls and Omore which generate almost 80% of their revenues from this particular category. 2. HICO only sets aside approximately 3-4% of its budget for marketing expenses as opposed to Walls which assign almost 20% of its budget for marketing. 3. Another weakness that HICO encounters is their weak marketing strategy. The poor marketing campaign results in poor positioning of the brands image among respective consumers especially the youth who frequently view advertisements of Walls and Omore as compared to HICO whose advertisements only run on City42. Thus, the brand equity associated with the brand image is very low as compared to the other competitors like Walls and Omore who have developed a well working marketing strategy as compared to HICO. Walls being an international brand use proper research techniques, R&D, distribution channels and experience, etc. to conduct research which is not possible for HICO and thus has failed to apply R&D techniques and research processes to test the market.4. Their market mainly consists of major cities of Pakistan such as Lahore, Islamabad and Karachi with limited availability and visibility. HICO is characterized with low market share and market visibility. This further has an impact on sales because the market in the major cities is already occupied by giants.5. The distribution network of HICO is not well established. Most of the time, the retailers are out of stock and the trikes presented are not attractive enough as compared to that of Walls with presentable trikes. 6. The distribution network of HICO is not well established. Most of the time, the retailers are out of stock and the trikes presented are not attractive enough as compared to that of Walls with presentable trolleys. 7. As HICO focuses on internal growth and makes their own profits, they dont depend on public financing as Walls does heavily. Due to this, they have shortage of capital.8. In addition to that, the product packaging is not attractive enough to gain customer attention.9. Another weakness resulting in their low market share and sales is that they dont provide any incentives to the retailers. Walls has provided its retailers with deep freezers in order to incentivize on the market which also has a hand in increasing its market share. (Ahmed, 2014)OpportunitiesThe frozen-food industry despite facing a number of challenges can take benefit from opportunities available to it and has an enormous potential to grow. HICO Company also being part of the industry has a number of opportunities to take benefit from. Some of the opportunities available to HICO are:1. HICO generates most of its revenues from take home category and the revenue from its impulse items is negligible as compared to Omore and Walls. So, HICO has an opportunity to tap this segment of the market that buys impulse category items. Since HICO has a loyal customer base that are purchasing its take home category in large quantities, so if HICO properly advertises, positions and markets its impulse category items it can also increase its revenues from this particular category.2. HICO can also use different shapes for its impulse items to entice consumers especially children to buy its product which will ultimately contribute positively to sales.3. Generation gap is also an opportunity for HICO. Since younger generation is not aware of HICO it can create a strong brand positioning as well as loyalty by increasing its focus on production of impulse items and use of trikes which is been aggressively used by its competitors.4. HICO ice-cream is purely a dairy product and it has its own dairy farms, because of which there is no compromise in terms of quality. So HICO can also increase its sales by creating awareness among people by letting them know about their quality and pureness through advertisement and marketing.5. Similarly, HICO can create awareness among health conscious people and ensure them that its products are purely dairy based and do not make use of vegetable oil as being done by its competitors such as Walls and Omore. Making people health conscious will eventually increase the sales of the company as its products are purely dairy based. 6. Moreover, HICO is the only ice-cream manufacturer in Pakistan that makes diet ice-cream for weight conscious and people with diabetes; it should market it properly to increase sales of diet ice-creams also.7. Since, the trend of eating out ice-cream in ice-cream parlors is increasing, HICO can take advantage of this opportunity by making by its own ice-cream parlors starting with the major metropolitan cities of Pakistan and later it can expand to other cities as well. (Ahmed, 2014)ThreatsAlthough Happy Ice-Cream Company produces products that are of exceptional quality and are of multi-national level, but due to its presence in limited number of cities HICO faces severe competition from companies like Walls, Omore etc. Because of these giants as well as external factors HICO faces a number of threats which are discussed below:1. The biggest threat faced by HICO as well as by other frozen-food industry companies is of load shedding. Uninterrupted power supply is required for continuous production process and because of this companies now have to use generators to supply electricity to their cold storage units which increases their per unit cost by about 150%. Electricity shortage also results in reduced volumes. HICO, being a smaller company as compared to Omore and Walls is more affected by the electricity issue.In addition to this, the electricity problem has also resulted in increased returns of spoiled ice-creams from the retailers, which also increases the cost being faced by the company.Likewise, house-hold consumers have started to buy in smaller quantities due to spoilage of ice-cream as a result of load-shedding. This reduction in buying is more of a problem for HICO than others. The reason being, HICO generates almost 80% of its revenues from its TAKE HOME CATEGORY, (which includes 900ml brick and special packs). HICO Companys revenue from impulse category is only 5% as compared to 70% of Walls and Omore. Thus the impact of reduction in buying quantity of house-holds is more for HICO as compared to others. Hence this external factor is hurting the companies operating in frozen food industry to a very large extent.2. Generation gap is also a threat faced by HICO. The younger generation is not really aware of the products of the company because of the companys little focus on impulse items. Moreover, competitors are directly targeting youth and children in advertisements these days. 3. HICO being a local company and competing with big industry giants also faces the threat of price competition. Although currently HICO products prices are lower than the industry leader (Walls), but if circumstances change and Walls feels the need to compete with HICO it can easily lower its prices as compared to HICO because of the economies of scale. HICO is a smaller company as compared to Walls and Omore and it might not be possible for HICO to compete on the basis of price.4. Likewise, because of the larger funds available to other companies as compared to HICO they can work heavily on research and development and can come up with improved technology as well as flavors that can hurt others in the industry. Moreover, they can spend heavily on their marketing activities as well.5. Terrorism is another factor that is affecting almost every business industry of Pakistan. People are afraid to go to crowded places and they prefer to remain in their houses which eventually reduce the sales of the companies.6. The economic conditions of Pakistan are also dreadful on businesses in Pakistan. The purchasing power of people has reduced which ultimately affects the businesses. HICO also has a tendency to be affected by this threat. As most of its revenues are from take home category which is expensive as compared to other categories for a consumer, therefore people because of their reduced ability to buy may purchase less and eventually the sales of the company may suffer. With the inflation rate of Pakistan in double digits, it is inevitable for HICO to increase the price of products to meet its costs. (Ahmed, 2014)PORTERS GENERIC STRATEGIESPorter has suggested three generic strategies for creating a defendable position in the long-run and outstripping competitors. Overall cost leadership Differentiation FocusOut of these three strategies, HICO only adopts Differentiation Strategy.DifferentiationIt explains the concentration of the business on achieving greater performance in an important customer benefit area valued by a large part of the market. It means creating your products or services different from those of competitors or making it more attractive to the customer base. This strategy is highly dependent on various factors, like industry, market, customer base, and the nature of the actual products or services. Whatever factor it is, it should have something that makes the products or services prominent.HICO differentiates itself by providing superior quality pure dairy products. HICO has always been seeking for quality leadership to differentiate itself from its competitors. Good quality and pure dairy products have always been the core competency of HICO since its inception. They differentiate themselves by manufacturing 100% pure dairy ice-cream to provide its customers with the best tasting ice-cream in the country. Differentiation is a secure strategy for HICO in earning above average returns because it protects it from competition by creating brand loyalty. By making customers less sensitive to price changes, it lowers the price elasticity of demand in its products. The quality and purity factor of HICO makes them play safe in the industry with a word ice-cream attached to them. As mentioned by their Brand Manager, We dont compromise on quality, gives the company an edge over its competitors because consumers who rate quality very high would not switch to other brands and would continue to consume HICO (hard core loyals). This results in high profit margins and thus HICO still manages a stable sales volume without having to spend on marketing. MNCs usually have a fixed budget of around 14-15% kept aside for their marketing efforts. HICO only spends 3-4% on marketing efforts as compared to Walls which spends around 20%. This strategy also diminishes bargaining power of buyers since now they have fewer substitutes available of pure dairy products. With a differentiation strategy, HICO can command a premium price for its products. Based on customer loyalty it can increase unit sales. In adopting such a strategy, the perceived risk is higher than others that the product might not be valued up to the expected level because for the product to be valued proper market awareness strategies need to be undertaken. This will help creating brand image in the consumers mind and allow them to take a chance. The greatest risk for HICO in pursuing a Differentiation Strategy is the risk of attack by its competitors following Focus Differentiation strategies in different market segments. To alleviate this risk, HICO needs to have an active product development process where constant innovation will help in keeping specialized players at bay and thus will help in achieving higher growth targets and profit margins.

Product Life CycleProduct life cycleis an analysis that tries to classify a set of common stages in the life of commercial products. Product life cycle commonly known as PLC is used to plot the lifetime of the product through which a product goes during its lifespan. The product life cycle is an important concept in marketing which explains about the stages a product goes through from its inception till its complete removal from the market. The final stage is not seen by all the products because some products have a potential to grow and others rise and fall (Kotler, Marketing Management, 2014). The main stages of the product life cycle are: Introduction Growth Maturity DeclineHICO is at a maturity stage in its life cycle in which it has a slowdown in sales growth because its products have achieved acceptance by most potential buyers (Kotler, Marketing Management, 2014). At this stage of its life cycle, the profits for HICO have stabilized due to tough competition by big brands in the market, Walls and Omore.

HICO is at its maturity stage and at this stage it is introducing a new premium line, HICO Indulgence.

Moreover HICO should focus on scalloped PLC pattern in which it should manage to make its sales pass through succession of life cycles based on the discovery of new-product flavors, uses or users (Kotler, Marketing Management, 2014). Introduction of the new premium line by HICO will give it a push in the growth in sales phase.Market Research In order to analyze the customers demands and their purchasing behavior market research is an important technique which is further assisted by several tools. It helps to examine consumer preferences in the market their needs and gives insight for different features of brands they value for. We approached questionnaire tool for our research in which we extracted basic information regarding consumer buying behavior, their taste preferences and some other features for HICO and its competitors. The study was held in Lahore School of Economics with a sample size of 50 respondents for their response about the brand. The results are shown in Appendix I.Out of the total respondents, 94% like ice-cream and only 6% do not like ice-cream. Ice-cream is a product that people do consume often but its more of once a week purchase (44%) followed by once a month (34%) and 3-4 times a week (20%). This basically shows consumption frequency of the ice-cream and frozen desert industry by different respondent. 54% of the respondents purchase from convenience stores. Whatever brand is available is available at these particular convenience stores; they prefer buying that along with other convenience goods. They mainly focus on impulse articles (68%) which is mainly being catered by Walls and Omore. 32% respondents purchase family packs. HICO is the market leader in this particular category of take home articles and caters to this 32% of the respondents. 86% of the respondents had tried HICO and 17% had an excellent perception about HICO, followed by 65% who had a very good and good perception about the brand. When asked what is the first brand that comes to their mind when they think of ice-cream, 56% responded Walls followed by 34% of HICO. Moreover 66% of respondents buy Walls, 24% buy HICO, 8% buy Omore and 2% buy Gourmet. This is because of quality (60%) followed by flavors (25%) and purchasing convenience (9%). Respondents showed 0% response to price feature while making a purchase. This is mainly because of strong brand image of Walls which has it has been able to achieve through diverse marketing strategies. Walls never fails to deliver its quality and because of which 88% of weight was given to very satisfied and satisfied. Consumer preferences and tastes have changed over the years. With new international brands competing with existing brands, there are a lot of choices available to consumers from which they can choose. Walls has been able to respond to this and has come up with new flavors to cater to changing tastes and preferences. That is why 92% weight was given to very satisfied and satisfied from their product range. 66% weight was given to very satisfied and satisfied from their customer service and 98% were satisfied and very satisfied from its purchase convenience. Walls is almost available at every convenience store, grocery store and super markets, etc. This is attributed to their wide distribution channel. Moreover Walls has also recently started its home delivery service in Karachi and Lahore. They promise to deliver at your door step within one hour. This has further enhanced its purchasing convenience. Respondents gave a weight of 78% to very satisfied and satisfied from HICOs product range. As compared to Walls, HICO has a limited number of flavors to which it has confined itself from the very beginning. It continues to deliver the same flavors. Satisfied and very satisfied respondents gave a weight of 80% to quality. This is mainly for those consumers who value pure dairy ice-cream and are fully aware of the fact that HICO provides pure dairy ice-cream as compared to its competitors. As compared to Walls, HICO was given a weight of 60% in terms of purchase convenience. HICO is not readily available at all convenience stores. They tend to focus more on take home articles as compared to Walls which derives almost 80% of its revenues from impulse articles which are readily available. HICO being the market leader for the take home category (derives 70% of its revenues from this category) still fails cater to availability. Out of the respondents who purchase HICO, buy it because of their unique flavors (54%) followed by quality (38%) and price (8%). Respondents showed 0% response to purchasing convenience. People who purchase Omore mainly do it because of price (50%) followed by quality and flavors (25% each). Finally people who buy Gourmet ice-cream mainly do so because of purchasing convenience. SegmentationMarket Segmentation is the process of breaking down all consumers into groups of potential buyers with similar characteristics. (Tanner). It is necessary for a firm or company to perform market segmentation so as to attract the right customer for ones product or service and to increase marketing efficiency by directing all of ones efforts towards the right people.Market segmentation is done usually on the basis of the following (Kotler, Marketing Management: A South Asian Perspective, 2014):1. Geographic segmentation

2. Demographic segmentation

3. Psychographic segmentation

4. Behavioral segmentationLets first take a look at how the company acts in the each of the above segmentation criteriaGeographic SegmentationThe company originally catered to only to the residents of Lahore, but after 1997, they started catering to the residents of other cities as well such as Karachi, Faisalabad, Rawalpindi, Peshawar etc., but their main focus has been Punjab, probably due to the fact that their factory resides in Lahore and it decreases freight and transportation costsBut as compared to Walls and Omore, HICO is not readily available everywhere. Even in the big cities like Lahore, Karachi and Islamabad, HICO is most usually found in some large departmental stores and super markets only, but even they do not seem to contain all the variety of ice creams HICO has to offer, as you only usually find the take home category type with them. The reason for this lack of growth is that the company focuses more on an internal growth strategy and doesnt depend heavily on public financing unlike Walls for example and the company also does not provide any incentives to retailers.Demographic SegmentationUnlike walls and Omore who target demographic variables such as age and income, HICOs main focus seems to be more income based as bulk of its revenue (80%) comes from the sale of its take home category (which includes the 900 ml bricks and special packs), though HICO has applied a multi-channel strategy by offering other ice cream varieties such as lollies, cones, and cups etc., the above figure of 80% shows how much potential the company has if it starts to focus on other demographic variable such as age as seen done by walls (its paddle pop category for kids and the cornetto and magnum line for teenagers and adults).Although the price tag of HICOs products is lower than of the competition for its take home category type, not everybody can afford the take home category of ice creams, so HICO seems to be focusing itself on the SEC A and SEC B. (not only due to restrictions in income but also due the erratic electrical blackouts.)In terms of generation, the company seems to be facing a generation gap, as although it claims to be a company which is established since 1958, the younger generation does not seem to be that much aware of the brand, the reason being the lack of a proper marketing and advertisement strategy for its products as compared to the giants such as Walls. Psychographic SegmentationPsychographics is the science of using psychology and demographics to better understand consumers (Kotler, Marketing Management: A South Asian Perspective, 2014). HICOs focus is also on the consumers who seek variety and want a different experience than the norm, which the consumers get as not only does HICO offer more variety of flavors than the major competition (Walls and Omore), the company also gives the image of health and quality to its consumers as its made of pure milk fat and can actually be called a dairy ice cream while the products of Walls and Omore are actually referred to as frozen desserts.HICO not only targets those who seek variety, but their main differentiating factor seems to be the focus on value that they create for their customers. HICO believes in creating products that not only conform to the quality that they promise but also provides value to their customers in shape of a product that is by its true name an ice cream, made from butter (milk fat), and is not an adulterated version made by using vegetable oils as seen done by other brands in the market. Thus HICOs ice cream tends to be denser and creamier in nature than its counterparts in the market. This provision of value has made HICO a loyal supplier of huge buyers like Avari, Gym Khana, Heera 36, Freddies caf etc.Behavioral SegmentationThis segmentation divides the buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product. (Kotler, Marketing Management: A South Asian Perspective, 2014)The company states on its packaging made with pure milk and fresh cream, so it offers the benefit of being pure and good for the health, as assumed by buyers. The company also offers the benefit of being one of the few diet ice creams available in the market, which is added bonus for buyers who seek this product either for diabetics or for health conscious reasons. (so also catering to market niche)As bulk of the companys revenues comes from sale of the take home category, the consumers seem to be buying them for the sake of bulk consumption such as regular occasions, parties, weddings etc.All of the above variables point towards how HICO can leverage on its present establishment to launch a premium line of ice creams.For its re-launch the company will have to be specific in terms of its market segments that will meet its core competencies and resources,According to Kotler (Kotler, Marketing Management- A South Asian Perspective, 2014) and Keller, there are many levels of market segmentation1. Mass marketing2. Segment marketing 3. Niche marketing4. Local marketing5. Individual marketingThe process of Market Segmentation involves the following steps (Kotler, Marketing Management- A South Asian Perspective, 2014)1. Choose the market2. Apply the segmentation variables3. Evaluate segments for targetingHICO will be following the above steps for the launch of its premium line.1. Geographic segmentationFor its re-launch, HICO now needs to focus more on the urban cities of Punjab, in cities like Lahore, Islamabad, Multan, Faisalabad etc. where there is a huge potential for growth as these cities are not only near Lahore as long as logistics is concerned but also help in keeping transportation costs low. These cities also show the economic development level and population density necessary for a proper market segment.2. Demographic SegmentationTo cater to a broader audience, HICO needs to segment its market, firstly into the young, hip and trendy young adults and secondly into the adults The targeted age group of HICOs premium range can be the 15-45 year old as most of HICOs sales are from the take home category type which it can leverage on.In terms of gender, HICO does not seem to position itself to anybody specific but whos stopping it from doing so, why not cater to the women who want to try and have a premium product but dont want to break the bank in the process, why limit the competitors to only Walls and Omore, when it can also challenge the likes of Ben and Jerrys and Hagen-Dazsin providing a premium experience.As mentioned before, the company seems to face a problem of a generation gap, but this problem is an opportunity in itself as history has shown that brands that disappear from the minds of people are more likely to come back with a bang. The company writes on its packaging, since 1958, giving a sense of nostalgia and taking pride in its roots at the same time, but for todays generations this very same thing means something outdated and old and this very same correlation leads them to believe in their minds that how can something so old be innovative and come up with something new.3. Socio cultural segmentation

The company seems to be catering both the traditional and new western flavor lovers of ice creams with flavors like kulfa, mango, praline etc. It needs to learn from the strategy of the likes of McDonalds, Pizza Hut and Walls that bringing local flavors and preferences into your product offering always boosts sales and always catches the taste buds of the locals,For e.g. Pizza Hut with their chicken tikka flavor and Walls with their BadamiKulfiflavor. Pakistanis seem to like rich and creamy flavors, and an experiment Wallss seems to be doing with in its Carte Dor line with flavors like SohanHalwa and GajarHalwa flavors.We Pakistan, as were a part of the subcontinent with India once, share a lot of preferences in terms of flavors, making it easier for marketers to copy and paste successful products in India into Pakistan, like Kurkure.

4. Psychographic SegmentationThe company needs to build a brand following, for which it needs to target the fashion savvy, the people who are the trend setters and who others want to imitate. Secondly it will also need to make the so called health seekers aware of the benefits of consuming HICO products made from pure milk and cream5. Behavioral segmentation

The company needs to make its products fall into the category of impulse items, it needs people to just pick their product the moment they see it or the moment they are near it or when they enter a store.

In terms of decision roles as compared to walls, for the paddle pop line kids play a significant role and for the Cornetto line it is the teenagers and the adults. HICO is not really catering to the needs of the kids, with its premium line it will be catering to the teens and adults.

As 80% of HICOs sales are from the take home category type, the product sales seem to be more related to occasions, so HICO can also relate itself to occasions in the minds of its customers just as Cadbury has done with its Cadbury Celebrations line in India, and Nestle with its orange juice, why just let it be a breakfast drink when it can be consumed at so many other occasions. Make the premium ice creams be part of ones special occasions

To increase its sales in the winter, Walls coined the phrase thandhai to kyahua for its advertisement to increase its usage rate in a season when ice cream sales are really low. HICO can leverage on such marketing efforts so as to increase its own sales.Defining the target market segment1. Both adults and teenagers from age 15-452. Both genders, but women n particular.3. People who seek variety, quality and something out of the norm4. People of SEC A and B living in the urban cities, Karachi, Lahore Islamabad, Faisalabad, etc.5. People who desire a pure product free from adulteration, i.e. health seekers (mothers could be targeted here as they are more worried and conscious of both their and the familys health)HICO could also target their product into the following niches (Kotler, Marketing Management- A South Asian Perspective, 2014)1. Image seekers, people who seek luxury, and who are more aware of their looks and imageand want to show to the world as if they belong to a higher social class, an e.g. from Walls page book includes its Magnum line.

2. Health seekers, people who are very health conscious and seek low calorie or pure ingredients, e.g. include diet ice cream, a niche category HICO needs to take advantage of by expanding its line of flavors in the category as they only produce one flavor for now (vanilla)

3. Pleasure Seekers, people who seek only high quality products to satisfy their need for an illustrious, refined and distinguished experience Level of SegmentationFor its premium line HICO will have to focus on the single segment concentration in which it will be targeting a niche market for people willing to pay a premium for a more superior experience of flavors, quality and self-satisfaction..

Positioning of HICOPositioning is a very important element in marketing. The positioning strategy that a firm adopts should be flexible and forward looking to allow the firm to achieve its potential in the future. The sales of HICO are somewhat stagnant, therefore HICO should reposition itself. The positioning strategy of HICO should be customer focused, which should prompt the customers to buy HICO. Therefore, in defining a new positioning strategy, the following steps were taken:1. Determining a Competitive Frame of ReferenceIn brand positioning, one of most vital tasks is the determination of the competitive frame of reference. It involves identifying the competitors of a firm. The competitive frame of reference does not necessarily include the firms or brands that offer similar products, but also those that offer dissimilar products but satisfy the same needs. For defining the competitive frame of reference for HICO, the competitors were first identified and then analyzed to determine their strengths and weaknesses. Identifying CompetitorsIn case of HICO, the major competitors include Walls, Omore, Igloo etc. Apart from that there are many ice cream parlors which compete directly with HICO. They not only provide ice creams, but also an ambience and experience in which people can enjoy. Moreover, based on the product category the major competitors of HICO are Gourmet and Butt Bakers. These bakeries make family packs and compete directly with HICO, which drives 70% of its sales from family packs and take home category. Moreover, Gourmet has the advantage of being available almost everywhere. Analyzing CompetitorsBased on our market research, the strongest competitor of HICO is Walls, as 66% of our respondents buy Walls, and Walls is the brand that comes to 56% of the peoples mind when they hear the term Ice Cream. Also, quality is one of the most important features attributable to the huge sales of Walls; therefore quality can be regarded as the major strength of Walls. For Omore, price is one of major factor behind the purchase. Similarly, for Gourmet, all the respondents agreed that purchase convenience is the major reason. However, a major weakness of Gourmet is its quality, as people do not buy it because of its quality or flavors.Therefore, based on the analysis of the competitors of HICO, the competitive frame of reference of HICO should include Walls and Omore.2. Identifying Optimal Points-of-Difference and Points-of-ParityAfter defining the competitive frame of reference for HICO, the next step is to define the optimal points-of-difference and points-of-parity for HICO.Points-of-DifferenceOne of the most distinguishing features of HICO is that it makes dairy ice creams. HICO owns its own dairy farms that supply it with fresh milk. As compared to HICO, its competitors Walls and Omore make frozen dessert. So, the major point-of-difference for HICO is its dairy ice cream. Because, the products of HICO are made from pure milk, its quality is an important factor contributing to its purchase. According to our market research, 38% of the people purchase HICO because of its superior quality. Moreover, another feature of HICO that can be classified as a point-of-difference is the flavors offered by HICO. HICO is famous for the introduction of Praline flavor in Pakistan; it is because of this reason that 54% of our respondents purchase HICO because of its flavor. Praline flavor is not currently offered by any of the other competitors like Walls and Omore, therefore the praline lovers only purchase HICO ice cream. Apart from that, HICO provides diet ice cream to the health conscious and diabetes patients, which is not offered by any of the other competitor. Therefore, it is also an important factor that differentiates HICO from its competitors. Points-of-ParityWalls and Omore dont offer dairy ice creams, but their product quality is also good. So, good quality is a point-of-parity that HICO shares with its competitors. Based on our research, a large number of respondents select Walls and Omore because of its quality. Apart from that HICO offers many flavors like Chocolate Chip, Mango, Vanilla, Strawberry etc. which are offered by its competitors as well. Good quality and availability of ice creams in various flavors are the category point of parity for HICO. Also all the competitors of HICO and HICO target the upper class and the middle class, therefore, the prices charged by all these ice cream manufacturers are quite high. Brand MantrasA brand mantra is a three to five words explanation which encapsulates the essence of the brand positioning and the brand value. A good brand mantra should reflect the companys competitive frame of reference, points-of-parity, and point-of-difference in just a few words. (Grams, 2011)The brand mantra of HICO should also be indicative of its points-of-difference and points-of-parity. The brand mantra of HICO should be such that there is a perfect alignment between culture and the brand HICO. The brand mantra of HICO should be as follows:Providing pure, premium dairy ice-cream to pleasure seekersThis brand mantra of HICO indicates HICOs focus on maintaining consistency, which shows HICOs emphasis on maintaining the quality and intolerance to anything that is not of the best quality. Moreover, it also highlights HICOs point-of-difference of being high quality as HICO is famous for its excellent quality. Also, HICOs point of difference of being amongst the few dairy ice cream manufacturers i.e. ice cream made from pure milk from its dairy farms is also stressed upon in this brand mantra of HICO. The overall brand mantra of HICO emphasizes HICOs focus on producing high quality ice cream every time and anything which is not the best is not acceptable at HICO. PositioningIn order to communicate this positioning strategy to its customers, HICO would need to maintain its high quality, hire and train employees to perform better services as compared to its competitors and develop superior marketing strategies and messages to communicate the image to its customers. It can do so by concentrating on three aspects: Premium and affordability Pure pleasure Healthy lifestyleThe result of positioning is the successful creation of a customer-focused value proposition, a cogent why the target market should buy the product (Kotler, 2014). The value proposition is as follows:Brand, Company & ProductTarget CustomersBenefitsValue Proposition

HICO IndulgencePleasure seekers; quality and health conscious consumersSuperior quality and unique flavorsPure premium dairy ice-cream

HICO- Premium quality taste at an affordable priceConsumer preferences and needs have evolved over time in the Pakistani market and theyre constantly looking out for exclusive and sophisticated options to try out. In such an environment, HICO can aim at building the most appealing image by providing premium quality dairy ice-cream to attract its target market that are looking out for quality goods as a means to demonstrate their socio economic class. With an increase in purchasing power of the SEC A and SEC B, it would be a perfect time for HICO to place itself in the minds of the consumers and gain appreciation in terms of purity and self-satisfaction.HICO should not concentrate on sales volumes and profits (price) at the moment and should concentrate on building a strong and stable image. The ice-cream industry is characterized by an impulse nature. Consumers dont make planned purchases of ice-cream items rather when they enter convenience stores, grocery stores, super markets, etc a decent number of impulse ice-cream purchases take place. By communicating an image of premium quality ice-cream provider, consumers should not perceive it as being snobby or inaccessible. For this reason HICO should cater to premium quality and affordability simultaneously. HICO- A unique experience leading to pure pleasureHICO should aim at catering to pleasure seeking individuals, who are generally brand conscious. HICO needs to communicate its dedication towards delivering high quality and standards. It needs to emphasize its uniqueness as the sole provider of pure dairy ice cream product and the blissful ice cream eating experience the pure indulgence that melts customers heart that they cannot find in any other brand. In order to communicate this message to its target market, it needs to reinforce its differentiation strategy along with commitment to deliver consistent quality at all times.

HICO- A healthy choice for a healthy lifestyleHICO should effectively cater health conscious young adults who are interested in desserts but prefer natural ingredients or low fat substitutes. They should carve in the consumers mind that HICO is the only pure dairy ice-cream provider as compared to its competitors and is free of vegetable oil that is used to manufacture frozen desserts. In this way they would be able to convince consumers that their product does not pose a threat to their lives. Diet line products by HICO are the real healthy side of ice cream. By introducing such a product line to customers, it directly caters to health seekers who are highly concerned about their health but still want to enjoy rich and sweet desserts. It should introduce a wider product range for such a market niche. Lastly, HICO can promote its brand image of providing healthy products is through a calorie display showing and explaining the actual number of calories in every scoop. This way it can reflect that it is deeply concerned about consumers well being and fitness.

With the help of these three aspects, HICO can translate its brand mantra of Providing pure, premium dairy ice-cream to pleasure seekers into reality.

Establishing the Brand Positioning:The next step is to develop the brand positioning and communicating it to all the people involved in the organization. The bulls eye for HICO is shown in the Figure 1. Figure 1 shows the brand offerings of HICO and also shows some of the attributes of HICO that makes its a better choice than its other competitors. To communicate the category membership, HICO should announce its category benefits. As shown in the figure, HICO should emphasize on its superior quality and dairy ice cream to attract the customers to consume their products. Moreover, as HICO mainly focuses on the production on family packs which are bought mostly by the elder people in the family; it is not perceived as a brand for the younger generation. HICO needs to change this perception by positioning it as a brand for the youngsters too. For this purpose, it should increase the production of the impulse articles and it also needs to communicate it through its advertisement and designing the packaging of the impulse articles with vibrant and lively colors.

Affordable priceConsumer TakeawayHICO provides best quality dairy ice cream, while being healthy at the same time. Consumer TargetQuality Conscious Ice Cream ConsumersConsumer InsightLack of Good Quality ice creams available for health conscious peopleConsumer Need StateDesire for Superior Quality Ice creamsCompetitive Product SetWalls, OmoreFigure 1: Bull's Eye Positioning for HICORed Color of LogoLogo portraying it as a Happy BrandExecutional Properties/ Visual IdentityHealthy and FitNurturingValues/Personality/CharacterOwn Dairy Farms to Ensure Good Quality of MilkSubstantiators (RTB)Brand MantraProviding pure, premium dairy ice-cream to pleasure seekersPoints-of-DifferencePoints-of-ParityGood QualityPure Milk High QualityUnique Flavors

Differentiation Strategies

High QualityWalls

HICO

Omoree

Low Price

High Price

Low Quality

In view of the above figure, HICO should position itself in the Pakistani market in comparison to its competitors using the differentiation strategies. In order to differentiate your product from that of competitors a proper differentiation strategy is required. Since positioning is not what you do to a product; it is what you do to the mind of a prospect. Therefore for a better positioning, a well planned differentiation strategy is required to compete over other brands. Competitive advantage can link the differentiation strategy to the positioning of a brand in the mind of their consumers. Its basically the companys ability to perform in a better way over its competitors. Depending on the competitive advantage a company can build their differentiation strategy in terms of product, services, channels, etc. The main stream of ice-cream industry in Pakistan is highly concentrated by two players; Walls being the market leader and Omore being the market follower. They provide variety of products to their customers. On the other hand the secondary level for ice-cream industry is based on various parlors operating that have provided consumers with a variety of flavors along with an ambiance and dcor to dine in and enjoy their ice-cream. HICO has captured a competitive advantage in terms of providing premium ice-cream along with a purity attributeProduct DifferentiationHICO has differentiated itself in terms of premium quality; thick and creamy taste yet delicate in its texture. Providing customers a unique taste and flavor will enhance their competitive edge. Moreover observing the trends they should opt for introducing new mix of flavors as the industry is now occupied with international players which provide their customers a broad range of flavors. Therefore HICO should come up with a new flavor mix delivering their customers a variety of options in order to increase their customer base. HICO should continuously add on to its premium line in order to provide premium quality dessert that can be distinguished through their unique and exciting flavors and purity.Ice-cream is brand that is usually categorized under impulse purchases. Walls and Omore have targeted the impulse article category very effectively. Major portion of their revenue comes from impulse articles. Whereas HICO has totally ignored the impulse category which if looked after, has the potential to generate more revenues than their take home category. Furthermore HICO should promote their USP of pure diary ice-cream through advertisement so as to increase customer awareness. This way they can achieve a better market position that will help them differentiate from competitors who on the contrary provide frozen dessert. Consistency in Quality Differentiation HICO delivers a pure product since its inception. Superior flavor and texture are principal to HICO and their definition of quality extends much further. Since they signify their commitment to quality that differentiates them from their competitors, more focus should be laid on retaining it in the long run. Maintaining the initial quality level and further bringing in new checks to their manufacturing process can help reflect premium value to their customers. Consumers who are health conscious and dont compromise on quality will focus on the brands that provide them with ultimate taste and quality. HICO can enhance its competitive edge if it works on spreading awareness among their potential consumers and others so as to make them identify the basic differentiating factor that they provide. Service Differentiation HICO should come up with providing new services like it competitors. Walls recently came up with its home delivery service for its products. Since HICO derives its major chunk of revenues from its take home category, it should also start delivering such services since the volume in the take home category is sufficient to meet the delivery costs and will ultimately benefit the company. Since there is an increasing trend in ice-cream parlors nowadays, HICO also has an option for an ice-cream parlor that provides premium ice-cream products which are rich in taste and flavors. It can present an opportunity for increasing their brand awareness among customers and provide them with quality service. Delivering superior services with a classy ambiance will make the customers feel good even if its just an ice-cream parlor. HICO can also start opening a network of their distribution outlets which will be a unique concept in itself and will definitely add value to their customers. Since HICO suffers lack of availability as compared to its competitors, it will be a point of service differentiation that they can provide. Focusing on quality and service differentiation of their brand among their competitors can help improve market share. Image Differentiation The word HICO that is abbreviated for Happy Ice-Cream Company doesnt portray the meaning and the quality they provide. The image they have created in consumer minds is just that of a local ice-cream provider. Providing a pure diary product is something that they should focus on to deliver value to their customers. In order to do this successfully, they need to enhance the image of the company. Instead of showing some sort of cartoon character in their logo, it should be revised with some elements that represent quality symbol along with happiness that depicts a true meaning of pure diary ice-cream for brand conscious people. It should reflect the premium range of HICO. Branding StrategyBrand strategy is the how, what, when, and to whom you plan on communicating your product or service (Sorenson, 2012) . It is not just the logo, name or the trademark that is your brand but it is actually what perceptions people have of you and how emotionally linked you are with them. Branding strategy is important because you want to survive and think of the long run success in the future. All the successful companies in the world have proper branding strategies of their products, from the iconic golden arches of McDonalds to the instantly recognizable bright green color of Garnier Fructus products. Its done to not only build loyalty, but also to increase market share, get better financial results, to create trust, and to eventually survive in this world of ever increasing competition.HICO is in a need of a proper branding strategy to set it apart from the competition and to survive in the future. Although HICO is operating right now at maximum capacity and selling every unit it makes, its market share is gradually decreasing over time to the likes of Walls and Omore, and eventually one day HICO will be driven off the face of the map of the ice cream world. This is an inevitable truth and to avoid such a case from arising, HICO needs a proper branding strategy.As Kotler mentions, in branding new products, a firm has three main options (Kotler, Marketing Management - A south asian perspective, 2014)1. Develop new brand elements for the new products2. Apply some of its existing brand elements3. Use a combination of new and existing brand elementsFor HICOs launch of its new premium line of HICO Indulgence, HICO will be going forward with the third option by using the strategy of line extension, which is itself a category of brand extension. This decision is taken so that not only the new launch can leverage on HICOs previous success and image of quality but also to give HICO an overall image boost as well and to relate it with the word premium.But as it is well known that brand extensions can lead to brand dilutions but HICO itself faces a threat of imminent extinction in the future. For them its either to expand or die out eventually.For a comprehensive branding strategy it needs to have the following six components (Sorenson, 2012):1. Tie the brand to the business model2. Be consistent3. Connect emotionally4. Reward and cultivate5. Be flexible6. Watch out for competitors.a littleFor HICOs branding strategy it will be consistent with its previous belief in providing quality products at an affordable price, because this has been the very belief of HICO from the beginning and will be consistent throughout the course of the brands life. HICO will also be tying its brand to the word premium, although it has tried to do that in the past as well but has failed because the positioning of the word premium in peoples minds is more related with the price, packaging and name of the product. HICO will thus be trying to connect emotionally with its customers by making them part of the family, the brand will have to be active on Facebook and twitter by listening and responding to customer feedbacks and giving promotions online and on social media sites, that is to increase customer involvement. Then use these people to your advantage, make them increase your value by not only nurturing them but also making them feel part of a club or group and eventually harness the advantage of word of mouth promotion.In the end, the brand will have to be flexible and be ready to take risks, for example of a flavor fails on the market or is not picking enough customers, be ready to change it and bring and experiment with new flavors so that to differentiate itself from the competitors in giving variety in not only the everyday flavors but also variety in giving a premium experience.In view of the branding strategy we aim to create the following brand resonance pyramid for HICO which is as follows:

High loyalty and attachment, regular and repeat purchases, catering to huge community, ice-cream craving will definitely push customers to purchase HICO Indulgence, launch of new flavors will attract customer to go try them.

Figure 2: Brand Resonance Pyramid for HICOSuper premium quality, healthy option, finest ingredients, reliable product, luxuriant design, and affordable price.Pure dairy ice-cream, unique premium-line flavors and premium diet-line.Premium dairy ice-cream providers at an affordable price, distinctive and recognizable logoHigh credibility, recognizable quality and superiority by providing pure dairy ice-creamPleasure, excitement, approval, security, healthy since it uses finest and purest ingredients.

The Product StrategyAccording to Philip Kotler, there are five product levels each adding more customer value as we move up the ladder which he named as the Customer Value Hierarchy. (Kotler, Marketing Management A South Asian Perspective, 2014)1. Core Benefit. The fundamental level our product offers is the satisfaction of consuming a dessert, that is the ice cream itself2. Basic Product. At the second level the product offers the ice cream in a container that is not only appealing to the customer aesthetics but also gives a feel of loyalty and prestige.3. Expected Product. At the third level, the consumers expect some attributes and conditions from the product, such as when they consume the product they expect the product to not have ice crystals in it and it should be up to specific standards of quality and hygiene.4. Augmented Product. To exceed customer expectations, HICO will have to provide their product on a quality level with flavors, taste, texture and packaging that consumers will not normally expect form a local company.Product ClassificationHICOs line of premium ice creams will fall under non-durable goods (goods that are consumed in or few uses) and under consumer goods classification will fall under convenience good (goods that a consumer purchases frequently, immediately and with minimal effort). But the eventual goal is to turn the premium line into impulse goods in the minds of the consumers. To Differentiate the Product To differentiate itself from the competition such as Walls Carte D'Or range, HICO will not only have to operate and deliver a high performance quality but also deliver a high conformance quality. Achieving this will be slightly difficult feat at first but not impossible as HICO is previously known to never compromise on the quality it delivers.As previously discussed HICO will have to pay special attention to the delivery of its products as it is noted in some areas that due to certain limitations its takes HICO a longer time to replenish stock even after it has been depleted from the shops itself. In terms of returns, the company is challenged by increasing numbers day after day as due to the load shedding of electricity and heat the ice cream melts or ice crystals form in them making the ice cream inedible or not conforming to the quality as expected by the consumer. The same or slightly higher margins for return will have to be kept for the premium category as compared with the take home category previously mentioned. Ingredient BrandingCompanies do ingredient branding all the time to leverage and to project the high quality of an ingredient onto some product. HICO already has two ingredient brandings, one with Oreo used in its Cookies n Cream flavor, and the other with using Canderel as an artificial sweetener in its Diet Vanilla flavor ice cream.For the launch of its premium line, ingredient branding will be needed with REESE'S Peanut Butter Cups for its flavor of REESEs Peanut Butter ice cream. The ProductTo define what constitutes a dairy ice cream, lets first take a look at the ice cream labeling criteria set by the U.S. Food and Drug Administration (FDA) (IDFA)Labeling DefinitionsThere are all kinds of labels on ice creams in the market but consumers are not exactly told the truth about what these labels truly mean and thus marketers make the consumers believe differently by implying different meanings from the truth in their marketing campaigns, for example what Nestle did with its Fruit Juices by calling them All Pure in front of the customers. 1. Ice cream is a frozen food made from a mixture of dairy products, containing at least 10% milk fat.2. "Reduced fat" ice cream contains at least 25% less total fat than the referenced product (either an average of leading brands, or the company's own brand).3. "Light" ice cream contains at least 50% less total fat or 33% fewer calories than the referenced product (the average of leading regional or national brands).4. "Low fat" ice cream contains a maximum of 3 grams of total fat per serving ( cup).5. "Nonfat" ice cream contains less than 0.5 grams of total fat per serving.Quality SegmentsThe quality of the ice cream is more related to the amount of air in the ice cream called over run, the price of the product, the positioning of the brand, product packaging and the quality of ingredients used. According to these standards the finished product should not weigh less than 4.5 pounds per gallon. (IDFA)"Super premium" ice cream tends to have very