You are on page 1of 13

INTRODUCTION

“Our brands are trusted everywhere and, by listening to the people who buy them, we have

grown into one of the world’s most successful consumer goods companies.”

150 million times a day someone somewhere chooses a Unilever product

A truly multi-local multinational – adding vitality to life

Known until over a decade ago as Philippine Refining Company (PRC),

Unilever Philippines started as an oil milling business which at its peak produced nearly 100,000

tons of coconut oil annually. Today the company is a leading manufacturer of home and personal

care products, foods, and ice cream.

Unilever Philippines Inc. has partnership with RFM Foods Corporation on the Selecta ice

cream operations.

Key facts

• Unilever is the world’s largest ice cream company with an annual turnover of €5 billion

• The name “Selecta” is a misnomer – the Arce family originally commissioned an artist to

design the logo of their company named “Delecta.” However, the artist crafted the logo

with such flourish that the D looked like an S, and people started calling the ice cream as

Selecta.

• Selecta’s Ice Cream Stick is a first in the world – no other ice cream company can do it

successfully!

3

MARKET ANALYSIS
SWOT Analysis
Strengths -0 Selecta is currently the leader in overall market shares

-1 Does well in the bulk ice cream category, with 80% of

its total ice cream output composing of bulk ice cream

-2 has high-quality product standards, innovative

marketing and promotion strategies, modern

production technology, and strong distribution

network at par with major competition
Weaknesses -3 limitation of their distribution network only to key

urban areas

-4 Output of Frozen Novelties is only at 20% without

having it strongly established in the market
Opportunities -5 Improvement of distribution systems among

companies remain quantitative through increased

numbers of freezers provided to distribution channels
Threats -6 Common in all competitors are their intentions to

greatly expand their distribution capabilities (Arce,

Presto, Magnolia)

-7 Smaller competitors are looking into getting at par

with the production capabilities of the main

competitors

The Market Situation
Ice cream is a dessert that is considered as a happy food, eaten by people feeling positive,

considering it as a trophy for whatever achievement. Conversely, it is also the go-to binge food

for depressed people. The ice cream industry caters to a flavor-conscious market. While some are

brand loyal, most give importance in the quality of the flavor and are usually adherents to their

personal flavor cravings regardless of brand.

According to market research conducted in 1996, 80 per cent of Filipino consumers bought on

impulse (they bought only upon passing an ice cream shop or scooping station, but without an

intention to buy first); 98 percent ate ice cream in the comfort of their home; and 70 percent of

the time, ice cream was an afternoon snack. Furthermore, studies showed that per capita

consumption of ice cream was less than a fourth of a gallon per person per year. In 1992, it stood

at 0.23 gallons per person and declined to 0.20 in 1993. On average, domestic ice cream market

was 13.8 million gallons from 1991-1993, worth an estimated P 2.5-3 billion per annum. Bulk

ice cream comprised 86 percent of the industry sales while the rest was accounted for by frozen

novelties.

5

“We expect the growth momentum to continue as we approach the stronger months and

as we put more marketing support in building our brands,” Concepcion noted.

Selecta, RFM’s ice cream joint venture with Unilever, likewise posted an impressive

double-digit sales growth for the third consecutive year with the successful launch of Family

Pack, Supreme and Limited Edition. It holds a commanding 54 percent share of the country’s ice

cream market.
“Since we bought the Selecta brand 20 years ago, it has steadily grown to become the

number one ice cream brand in the country today. Our successful joint venture partnership with

Unilever has helped strengthen our position in the market, and this was complemented by the

entrepreneurial team of Selecta led by my brother John,” Concepcion said.

Ice cream exports also grew, driven by volumes from the Middle East market.

For his part, RFM executive vice president and chief operating officer Felicisimo Nacino

Jr. said: “Moving forward, RFM shall continue with its efforts to bring greater value to

consumers with more product innovations at affordable prices, coupled with strategic brand-

building programs, as it continues to keep watch on its productivity levels and cost structure

amidst the volatile raw materials market.”

In summary, the general market analysis shows that both “healthy” and “premium” ice

cream/yogurt sales are on the increase and will continue to increase. Further, the target market

for these products is middle and upper income families. The market analysis also reveals that it is

highly desirable to serve sandwiches and other foods to balance the seasonal decline in ice cream

and yogurt.

THE COMPANY PROFILE

Leading in new technologies

With an annual sales of over Php 24 billion, Unilever Philippines employs over 2,000

people nationally. The company has been a leader in introducing new technologies into the

country since the early days of its existence - margarine production in the 1930’s, non-soap

detergents, shampoos and toothpaste in the 1960’s and 1970’s and state of the art sulphonation

technology and cogeneration power plant in the 1980’s.
The nineties has seen the company focusing on several improvements in the Environment

front one of which was the introduction of the first 100% biodegradable detergent bar in the

Philippines. Unilever works closely with the community and other NGOs to protect and improve

the environment. In year 2000, the company received recognition for its environment

management systems with an ISO 14001 accreditation.

Purpose & principles. Our corporate purpose states that to succeed requires "the highest

standards of corporate behaviour towards everyone we work with, the communities we touch,

and the environment on which we have an impact."

Unilever's corporate mission – to add vitality to life – shows how clearly the business

understands 21st century-consumers and their lives. But the spirit of this mission forms a thread

that runs throughout our history.

7

THE PRODUCT AND ITS SUGGESTED RETAIL PRICE

Selecta adds vitality to life by using only the best ingredients and the freshest inclusions in its ice

cream. A company with a heart - carefully crafting and dedicating its products for the enjoyment

of its consumers.
8

THE PROMOTION

“Mas masaya talaga pag may Selecta!”

Selecta Ice Cream’s strong comeback in the market ten years ago is sterling proof of how

celebrities can bring instant life to a moribund product. Selecta was a dying brand when RFM

Corporation bought it in a bid to contest Magnolia’s monopoly of the Philippine ice cream

market.

One advertising feat, however, would change the Philippine ice cream industry overnight.

In a stroke of casting genius, Selecta enlisted movie actors Sharon Cuneta and Aga Muhlach,

then the hottest stars, to appear in back-to-back commercials for its ice cream collection. The 30-

seconders featured each one relishing the richness of Selecta ice cream.
The day after the commercials aired, retail chains saw Selecta Ice Cream flying off the

shelves. Within a week from airing, Selecta managed to double sales. So strong was brand recall

that, riding on this, the company managed to launch various novelty items that year. Within that

same year, Selecta managed to eat up almost half of its competitor’s market share, and gained

market leadership in some markets. Today, the ice cream market is evenly divided between the

two.

9

THE PLACE OF DISTRIBUTION

Distribution Methods of the Products or Services

The company engages in different methods of distribution depending on the

products/services to meet the needs of customers.

The Company’s food and beverage products are sold through wholesalers, distributors,

supermarkets, wet markets, restaurants, and retail outlets. Real estate sales, on the other hand, are

made through in-house property consultants and accredited outside real estate brokers.

Our network of retail customers

Our products reach shoppers through a network of customers including retailers, wholesalers and

distributors. International retail customers such as Walmart, Tesco, Carrefour and Metro

predominate in the US and Europe and have a growing presence in developing markets. In 2008

around a fifth of our worldwide sales were channelled through ten major retail chains.
We also sell products through a more diverse group of distributors, wholesalers and small,

independent outlets and kiosks, particularly in developing and emerging markets. Meeting the

needs of these different types of retail channels will contribute to our growth in these markets.

Our goal is to ensure that Unilever is the partner of choice for our smaller as well as our large

international customers. With our expertise, wide-ranging portfolio of products and international

network of businesses, we are well placed to work with retail groups in innovative ways to meet

shoppers' needs.

10

TARGET MARKET PROFILE

Selecta has established itself in the most basic distribution areas, having provided

thousands of freezers to various retail outlets and scooping stations among the Philippines. The

competition intends to step up their saturation in these outlets, as seen in the efforts of Magnolia

and Arce to improve their accessibility.

Given that there is already considerable effort in continuing to expand their saturation in

these distribution areas, Selecta should go beyond these areas and start reaching out to people

outside the malls and stores, specifically those willing to avail of ice cream but are in no position

or have no intention of going to these distribution areas.

CURRENT MARKET PERFORMANCE

Total Quality

The company has adopted the Total Quality approach during the last ten years and was

the first in the industry to receive the ISO 9002 accreditation in 1994. Unilever has since worked
with the government, customers and suppliers (including SMEs) to spread the Total Quality

approach in the Philippines. Unilever in the Philippines is a leading company in the area of

Human Resources Management and Development.

SELECTA is always ahead in product innovations by creating new and exciting flavors
like Cookies and Cream, Halo Halo, Ube Macapuno, and Chocolate Almond Fudge, and
11
supported by heart-warming media campaigns that depict Selecta as an ice cream that creates

family bonding moments.

New technology for improved creaminess of ice-cream

Using conventional ice cream technology, ice cream is produced at -5 degree Celsius

after which it is cooled down to a storage temperature of -25 degrees Celsius. Unfortunately,

during conventional cooling-down, the air bubbles in ice cream coalesce which is associated with

a loss of creaminess of the ice cream product. This loss of creaminess can be compensated for by

a higher fat content of the ice cream, but this is not what the consumer wants. They want to enjoy

ice cream without feeling guilty because of health concerns.

Leading by innovation

The challenge for our R&D was to develop new technology that retains the small air bubbles and

the rest of the fine microstructure of the freshly produced ice cream in the product available to

the consumer. Our R&D colleagues from Port Sunlight, UK, suggested using extruder

technology that they utilised for texturing soap. Basically, an extruder is a low energy pump for

highly viscous material. At that time, twin screw extruders were state of the art, but this was

developed further in our R&D laboratories in Colworth House, UK, and Vlaardingen, the

Netherlands, into a patented single screw cold extruder technology.
12

FUTURE PLAN AND PROSPECTS

Marketing Strategies

The proposed marketing campaign revolves around a new distribution channel: the Selecta
“Delight at your Doors” Ice-Cream delivery system.

1 A motorcycle delivery network is proposed to be set-up in all of Selecta’s 12 major
strategic depots (Metro Manila, Cabuyao, San Fernando, Dagupan, Naga, Cebu, Bacolod,
Iloilo, Tacloban, Cagayan de Oro, Davao and Zamboanga) that brings Bulk Ice Cream
and/or Frozen Novelties right at the buyer’s doorstep in a matter of minutes. Padyak
versions (like those used in peddling frozen novelties) can be used depending on the
distance of the customer from the delivery stations.

1 Bulk Ice cream and frozen novelty deliveries will be having a minimum quantity limit to
ensure no net losses from fuel usage. Prices on ice cream bestsellers will have discounts
in delivery, and some “Ice cream packages” will be provided for select items, like a “buy
1 gallon bulk ice cream, get 5 novelties free” deal or so to also promote their frozen
novelties. And as in most delivery systems, patrons can avail of sulit cards that enables
you to avail of free ice cream products for every purchase of certain ice cream products.

2 Some new ice cream flavours or products will be introduced exclusively through delivery
in its introductory stages. In the launching of the delivery system, a new ice cream
product will be accompanyingly released with a special discount on it to encourage
consumers to avail of it through delivery.

3 Poster ads will be distributed to all distribution channels (groceries, supermarkets,
convenience stores, etc.) for posting. A promotions campaign, “Delight at your
Doorsteps!” will be implemented, where teams of promoters will be scouring
neighbourhoods of B, C and D market classes delivering free ice cream samples of the
new ice cream product that will be released through the delivery system’s launch along
with brochures that contain the flavour/product selections and delivery prices and other
product promos.
13

MKGMIII
BSBA
College of Commerce

This state of the art paper in Marketing is
submitted to:

Agapito C. Rubio Jr. DBA
Assoc Professor in Marketing

In partial fulfillment of the
Requirements in
Principles of Marketing

(October 15, 2009)

Submitted by:

TRILLES, ESSEKAE P.
SELECTA
ICE CREAM

TABLE OF CONTENT
I. TITLE 1

II. TABLE OF CONTENT 2

III. INTRODUCTION 3

IV. MARKET ANALYSIS 4-6

V. THE COMPANY PROFILE 7

VI. THE PRODUCT & ITS PRICE 8

VII. THE PROMOTION 9

VIII. PLACE OF DISTRIBUTION 10

IX. TARGET MARKET PROFILE 11

X. CURRENT MARKET PERFORMANCE 11-12

XI. FUTURE PLAN AND PROSPECTS 13