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Facts of the company

Arun Ice cream was an Ice cream maker & distributor company established by the person named R
Chandramogan, son of vegetable wholesaler from the south Indian state Tamilnadu. He was completely
inexperienced person and did not complete his college studies as he discontinued at very pre university
stage, but he had a strong urge to run the business and to succeed as a businessman. Initially he did not
know what the business to go for but after the suggestion given by his uncle he went for the ice cream
business. He started with a small premise in busy locality of Madras with which he got succeeded and
moved to three fold expansion in just second year of its commencement which was turned out and again
resumes to previous old premise! He continuously improved the quality of his product to meet the needs
of customers thus he captured the market of the hotels. Chandramogan was applying trial & error
method in his business! As Chandramogan was searching for niche market for his business he captured
the rest 5 % market of educational institution and shipyard chandlers about 95 % about 1975. Talking
about this 5 % market the rest 95 % market was occupied by other big banner competitor! He also
approached the district market of Tamilnadu completely ignored by competitor and captured the market
with the sound strategies! As his market for product grew up his sales were also taking place in high
proportion and became enough financially sound to payback the debts and to earn enough.
Chandramogan identified Pondicherry, Madurai, Kumbakonam, and Sivakasi as the potential market and
began advertising in such market to create brand awareness and to establish Arun as a strong brand, thus
he also captured these market because these markets were also ignored by the competitor. Initially he
started selling Ice cream in such area on ad hoc basis but then he gained the market and also the offer
from franchisee agent who was keen to invest in the Aruns franchisee, this lead to birth of franchisee
market of Arun Ice cream which was grown very steadily that even other agents were also began to
invest in Arun ice cream in their own freezers. In 1991 Chandramogan also established another high
capacity plant in Salem close to Kerala and Karnataka and in the milk belt which facilitated procurement
of milk.
Through regular advertisements and marketing his product Chandramogan established chain of
franchisee parlours of Arun ice cream. Arun emerged as the largest ice cream manufacturer in Tamilnadu
with turnover raised to 28 million from 150000 in 1970 and 425000 in 1981. Chandramogan established
seat and eat themed parlour in Madras suburbs and outskirts, By the year 1999 Arun emerged as owner
of the 60 % market share of Tamilnadu and 36 % of four south Indian states. Arun began to introduce 7
to 10 new flavours every year and thus Aruns product folio consist of 30 to 35 flavours at any given
time! Arun also acquired a fully automatic plant in Red Hill area with capacity of 15000 litres of ice
cream mix every day. And began operated in 1995. Because of the investment restriction The Madras
plant was setup under a separate firm named Hatsun milk Products though it was fully established by R
Chandramogan. Because of the continuous advertising and promotioning of the brand Arun began to
earn tremendous attention of the customers and also began to be supported by the large numbers of the
franchisee agents which played a crucial role in emerging as a big banner production and distributor of
ice-cream company!
MISSION
To provide best quality of ice-cream to continuously expanding customers.
Companys different ventures
Established first ice-cream manufacturing plant in Madras under the firm name Hutsan Milk Products
Established another completely new plant in Salem nearby Kerala and Karnataka in 1991 Established
another new fully automatic manufacturing plant in five acre land on Red Hill area on the outskirts of
Madras city. Established a Depot in Madurai in 1995 for handling distribution over franchisees located
in Tamilnadu, with adequate cold storage facility Established 700 franchisees outlets in Tamilnadu,

Karnataka, Kerala and Andhra Pradesh for continuous meeting the needs of increasing customers by the
year 1991

Core Competencies
Chandramogan had a strong urge to become successful as businessman
He continued business with strong advertising and promotioning activities to establish and more grab
more numbers of market share
3 major ice-cream manufacturing plant in Madras, Kerala and Karnataka
Excellent management over distribution handling over depot
700 franchised outlets
Having 60 % ownership of market share of Tamilnadu and 36 % of four south Indian states
Continuous striving for new market and trying to satisfy as much as new customers with best services
and products
Good personal level of relationship with all franchisee owner agents
Established milk collection centres in major milk producing villages close to ice cream plant.
Warm relationship with all milk producers and dairy farmers
Maximum satisfaction to dairy farmers in pick season of milk
Rich product folio of 30 to 35 products available at any given point of time
Advanced sales promotion activities in which participant can take part and have the product at very
negligible price for making customers aware about different types of products
Excellent promotional campaigns for overall marketing plan
High margin proportion for franchisee handling agents at 20 to 25 %, comparing to major competitor
at 12 to 15 %

STRATEGIES & PLANNING


He focuses the key selling point like addressed to outside the locality and focus on 5% market which
are general stores, hotel, restaurant, college canteen and social events like wedding parties. He met to
agents who procured and supplied to various ship line and understood special requirement regarding
packing and delivering to capture the market. Where fresh ice-cream was not got, he had plan to
supplied ice cream on ad hoc basis through agent within 4-5 days of the booking. Because of
imbalance in seasonal demand, milk which is the key input was procured from the farmer by collection
center and he offered guaranteed procurement of certain quantity of milk based on his lean season and
peak season, pay higher price. He sourced other input and ingredients such as sugar, fruits, packing
material, etc. From leading wholesaler/ manufacturer. He transported his supply by railway or by
refrigerated vehicles and also planed to set up new plant in 250-300km. Radius area to provide effective
service with average 7 to 10 flavors ice cream with the product port folio of 30 t0 35 products.
SWOT ANALYSIS
STRENGTH
He was risk taker and very enthusiastic person with strong thinking of doing something Provide
vast variety of product with 30 to 35 different favor ice cream There was a strong symbiotic
relationship between the company and its franchises. He recruited well skilled and experienced
manager in head of division. There were 700 outlets and 120 franchises and market share around 36%
in south India.

WEAKNESS
He uses single tier distribution strategy, directly supplying to the retail customer sales. He did not
have the excellent capabilities of anticipating the future demand He gave his franchises to relatives and
uneducated people Vast advertisement without proper assessment of financial position He sold his
product to such area where transportation services took more expensive. Dont match demand when
there is a pick season because of shortage of milk and other material.
OPPORTUNITY
There is a huge network of franchises and it will expand There is good chance to stand in
competitive environment after emerging in Hatsun Milk Food Ltd. There were lot of variety in product
for demand and growth of business It has cover 60% market so good sign to future growth through set
up new plants. Advertising & promotioning of brand made his company strong in terms of market
share & brand recognition
THREATS
There are various competitors which are giving their best in grabbing the market share
Chandramogan was not having specialized knowledge in managing the business Distribution channel
was not so wide to cover all the marker share

PROBLEMS
He did not believe in delegation of authority, he used to take the decision on his own!
He was applying trial & error method in business
Initially he stepped in market with vastly improved service and deliveries they were unaccustomed to
He had restricted big banner ,elderly, & highly potential franchisees agents to join him as franchisee
agent
Initially the problem arose because of the seasonal demand-supply imbalance in respect of the product
and its extremely short shelf life
Even despite the financial crisis, he continued to increase the numbers of franchisees on one hand and
in the variety of ice-cream flavours on the other hand.
ESTABLISHING PROBLEM
Because of the centralization of the authority & no delegation of responsibility over the wide
franchised network, nobody is able to take key decision in meantime
Chandramogan was applying trial & error method in business which sometimes became worst
nightmare for him
Chandramogan was very enthusiastic about the expansion and approaching the different beneficiary
projects, this led the company to financial imbalancement of the company during the expansion and
establishing the plants
He was making more expenditure on advertising and promotioning the brand and products of the
company which also played significant role in financial imbalancement
GENERATE ALTERNATIVE
Minimizing expenses over advertising and promotioning the brand can lead to effective utilization of
the resources towards a better management of company
He should improve his decision making skill and he should learn some of the strategies about the
business marketing-promotioning & expansion of the business
He should invite the suggestions from the all its franchisee agents because there are the franchisee
agents who are directly dealing with the customers so they can better understand the customers
He should appoint high educational people who help him to lead business in good position.

The remote area where no transportation facilities available in that case they have to supplies in fixed
period so that cost can be minimized
He should have the capabilities of forecasting the future and to act according to the customers trends
He should establish such a small various numbers of the distribution channels area wise which can
distribute its products effectively to the customers in meantime

EVALUATION OF ALTERNATIVES
Chandramogan improving his skills and appointing some experts person could lead his business at
good position.
Inviting the suggestions from the all over its franchisee agents can lead the company towards a better
understanding the needs of the demand of the customers.
Suggestion from agents, franchisees members and customers will help to fill defects in production,
marketing and distribution areas.
Learning from past events and anticipating the future events can lead the company towards excellent
grabbing the market share and establishing the increasing numbers of customers in very lean time
Establishing excellent system of distribution channels can lead the company to reach every customers
and satisfy them, thus maintaining the good relationship between the supplier and consumer.
BEST ALTERNATIVE
Recruitment of highly trained and technically experienced people lead the company in better way in
context of reaching the customers and taking the decisions related to minimizing the cost expenditure
taking place on advertising and promotioning the brand and steps related to expansion and
diversification of the business.
PLAN
The company should most importantly recruit best personnel for the technical and distribution task of
the company for better management of the company. The company should establish such a distribution
channel which can efficiently reach every franchisee agents thus reaching every customer. The
Company should control their expenditure on advertising & promotioning the brands so that available
resources can be used for different development purpose.