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In Indian ice cream industry, there are different scale productions of ice cream,

ranging from big multinational companies producing ice cream in big factories to
some single family which are producing ice creams in small factories. For example,
in India, people used to eat big brands of ice creams and also eat road side ice
creams which are made only from ice. It is analyzed that from the total Indian ice
cream market only 30% of the market is organized and this shows the fragmented
behaviour of the Indian market. There is no monopoly of one company which is
deciding the moves of all the market, but there are many international and domestic
firms with their respective market share. Ben & Jerry has analysed the Indian ice
cream industry in the pattern of porter five forces model given by Michael Porter
(Appendix-1). The five factors are:
Threat of new entrants: In ice cream industry firms compete each other on the basis
of product differentiation by offering its products to masses as well as to premium
segment. With ice cream product, the switching cost of consumer is low. The threat
from new players in the market is high because the manufacturing process is simple
and not more costly.
Powers of buyers: For ice cream manufacturing companies, the main supply chain
members are retailers, which buy in large quantities and pushes the products to end
consumer. There is high power of channel members and in case of individual
consumers power of buyers will also be high as they can go for different ice cream
brands.
Power of suppliers: Quality is the supreme factor. In India, the agri-business is still
not fully developed and is in developing stage. The concern for dairy producers
which are now going for ice cream manufacturing is very less. So, the power of
suppliers is low.
Availability of substitutes: To make the tongue sweeter there are many alternative
products like different sweets, Kulfi and Faludah. Kulfi is a traditional desert which is
prepared by using cream and Faludah is having rice noodle with flavours and are low
in price so there is high pressure on ice creams as consumer can go for substitutes.
Competitive Rivalry: There are some big companies in Indian ice cream market with
many emerging companies and new companies trying to come in the Indian market
making high competitive rivalry. Several multinational companies like New Zealand
natural ice creams are started serving in Indian market. There are domestic players
also which are emerging in this sector like Saras ice creams in Jaipur and Nirulas
ice cream in Northern region of India. Advertising expenses also have increased as
companies are advertising more to increase their market share (Elong et al, 2005).
After analyzing the Indian ice cream market, with the help of porter model, it is clear
that the ice cream market is having features of monopolistic market. Amul with its ice
cream product has to compete in this monopolistic type of market. Following are the
features of monopolistic market that also justifies that amul ice creams are in
monopolistic market.
Many sellers and buyers: In monopolistic market there are large number of buyers
and sellers. No individual seller can set the price of the total market. In india the
consumers of ice creams are also very large. In Indian ice cream industry there are
many players like Amul on the top with 38%, Unilever with 9% of the total market.

(Amul, 2008). Other companies are vadilal, metro dairy, hatsun agro in south India,
Baskin Robbins. There are large supermarkets and grocery stores which purchases
the ice cream in huge quantity from these companies to sell to individual end
consumer.
Freedom of entry and exit for firms: In ice cream industry, the established firm can
easily enter in the market with the new product using its existing channel
distribution. New firms also can easily enter the market as manufacturing of ice
cream is not much costly and there are no government regulations. The firms which
are not gaining normal profits in the market can easily go out.
Non Price differentiation: In monopolistic market, as a firm sets prices of their
products according to the market. The firms compete with each other by giving offers
and pack discounts to their customers. Advertising plays important role for
companies in this market. Amul sets up different ice cream parlours in the country.
Downward sloping demand curve: In ice cream industry as for all ice cream products
the basic raw material is milk, and to compete in the market companies have to
innovate their product as the demand otherwise will decline. Amul always comes up
with different flavours and sizes in its ice cream.
Current Strategies of Amul ice cream:- Amul launched its ice cream with a punch
line real milk real ice cream, states that the company uses pure and fresh milk to
produce ice creams. According to R.S. Sodhi who is chief general manager in
GCMMF, Amuls strength lies in consistent good quality, trust and relevance in their
products. Amul had never spent more than one percent of the total received
revenues on advertising and marketing (Deccan herald,2007). According to current
strategy, Amul will soon launch campaigns based on mass media advertising,
designed by FCB-ulka. Amul is also increasing its number of ice cream parlours
from 800 to 3000 and also increase in amul ice cream retail outlets from 60000 to
70000 (financial express,2007 ). By the year of 2010, Amuls target is to open 10000
ice cream parlours and to achieve 2.5 billion dollar figure. Amul is now adopting the
aggressive strategy in their marketing and trying to make more direct relationships
with the customers. (rediff news, 2007 ).
Future strategies: As a management consultant, I suggest that amul should follow
the following growth strategy in southern India. Considering only south India, amul is
not that popular, as it is in northern India and should target to increase the reach in
South India by the year 2010. In South India Hatsun Agros Arun ice cream gives a
very strong competition to Amul. Currently, Amul do not spend more on advertising
for their ice creams in southern India, so there is an opportunity of more advertising
and public relationship to get the maximum reach and grab more market. For
success in Southern India, Arun ice cream came up with exclusive franchise parlours
which were selling ice creams of Arun only, so to compete with arun ice creams,
Amul also have to open more of ice cream parlours in southern India as they have in
northern India (Hatsun, 2009). South Indians mostly like rice in their meals so, Amul
can come up with more of ice creams like different variants of faludas, to increase
the preference of consumers towards Amul. Like south Indians take coconut chutney
in their meals, amul can introduce some coconut flavour ice cream. Arun ice cream
do not target a particular consumer segment but, Amul should introduce more of its

existing sugar free range of ice creams and fitness candies in south India to target
health conscious consumers as south Indian people prefer more of nutritious level in
their eating habit (cultural india,2009). For manufacturing of all these products amul
has to set up more factories in Southern India, to reduce transportation cost. On
point of price amul always followed low pricing strategies for its ice creams and
giving best quality. As, amul mission is to cater best quality ice cream, it has already
build a strong image in Indian market. Amul can go for growth by external expansion
like, vertical integration ie, merger with raw material suppliers at initial level to
establish market and then giving contract to retail stores and supermarkets to reach
to individual customer. By, these strategies Amul as well as whole Indian ice cream
industry will be in profit. Today, the Indian ice cream industry is highly fragmented, as
discussed earlier. There are very few big players and rest all are small players which
makes the total market share. By, the above proposed strategy, Amul ice cream can
increase market share and by the year 2010,In Indian ice cream industry which is in
growing stage, there will be many MNCs and other big players, so, Amul has to
retain its top position in the market.
Conclusion: In the end, by above discussed report it can be analyzed that amul is in
a monopolistic market and by the proposed strategy amul ice cream can be on top in
southern India too by the year end 2010.
Market share: The Gujarat Cooperative Milk Marketing Federation states that all
Amul range of ice creams builds 36% of market share following by 8% of Hindustan
Unilevers kwality walls, then comes vadilal with 7% and Mother dairy acquires 7%
(livemint,2007). Hatsun Ago with its product Arun and Baskin Robbins both forms
4% of the market each and 3% is contributed by Kolkata based Metro Dairy . (Das,D.
Hindu business line,2007) (Appendix-1).
Competitors In the race, the fierce competitor of Amul is Hindustan Unilevers
kwality walls. When introduced in Delhi market in 2003, which was already prevailing
in flavour of Mother Dairy ice cream, product of National Dairy Development Board
gave a strong competition and also Hatsuns, Arun ice-cream available in south
India. Now, comes to some companies which melted in Indian ice cream industry.
United States based companies like Blue Bunny pulled out from market as of high
excise duties and low demand, And Baskin Robbins also first reduced its outlets and
also tried reducing prices, But, nothing worked and today the number of outlets is
very low (Roy, P. Rediff Money,2004). New player in India which is vastly spreading
its reach is New Zealand natural ice cream, which is renowned in the world and now
spreading its reach in India. New Zealand natural ice cream has opened its outlets
in Haryana, Maharashtra, Punjab, Rajasthan and West Bengal (New Zealand
Natural, 2008). Emerging player in this field is Saras ice cream based in Jaipur
(Rajasthan), having milk products with ice cream parlours and Nirulas is primarily a
regional player based in Northern India and top n town ice creams and All Naturale
parlours mainly in central India. The following companies are emerging in Indian and
in international market. They are Frolic foods company, Rupins company, Feroze
Foods &Flavours and MTR foods, all are Indian based companies which
manufactures ice cream in basic flavours and rich flavours(Indian industry 2008).
Market position and Market developments: To beat Mother dairy ice cream in
Delhi and Northern Capital Region, Amul adopted the market penetration strategy,

which resulted in 35 percent of market share worth of Rs.450 crore in period of four
years. (Goyal M. And Mahurkar U., India today,2001). All Amul products sales
turnover for 2006-07 is Rs. 42778 million and for year 2007-08 it was Rs. 52554
million with growth of 22.9 percent (Amul ,2008). In the fiscal year 2005-06,Amul Ice
cream has reached to about 34 million litres of ice cream which made the companys
value Rs.210 -crore and in 2006-07 company achieved the volume of 42 million litres
making turnover of Rs.270 crore in ice cream segment with an aim of getting
turnover of 200 million litres by 2010 (Das,D. Hindu business line,2007). Amul ice
cream got No.1 award in quality by a monthly consumer magazine, INSIGHT in
May-June 2002 . All plants of Amul ice cream got ISO 9000-HACCP certificate and
soon will get ISO 22000 certification for its plants. (Amul ice cream, 2008).
Market development: Amul was first to launched the sugar free ice cream to make
Indian society healthy ,tri cones in which a cone is having three flavours and
stamina candy which is Indias first fitness ice- cream, also by providing party packs,
hence gaining first mover advantage.(Amul ice cream ,2008). Amul is also marketing
ice cream mix which Hindustan Unilever does not. Amul is planning to extend the
number of Amul Parlours from 1,800 to 3,000 and kiosks in 2008. To gain a
competitive edge, Amul is also targeting modern trade channels to promote their
brands even during the winter (Srinivasan L., Financial Express,2008).

Appendix-1

market share

amul 36%

kwality walls 8%

vadilal 7%

31%

mother dairy 7%

36%

3%
4%

hatsun agro product 4%

4%

7%

baskin robbins 4%

7%

8%

metro dairy 3%

all other small players 31%