Carmen’s Best

Marketing Management
Case Study Analysis

Arellano, Chico
Arica, Kevin
Josue, Darwin
Penales, Von Anjo
Pioco, Louis Kym

STATEMENT OF THE PROBLEM

Given its current domestic presence and performance, Carmen’s Best (the Company) would need to decide whether to
continue to focus on the domestic market or to aggressively pursue global expansion.

AREAS FOR CONSIDERATION

1. SWOT Analysis

Strengths
1. Ice Creams are produced from quality raw materials. The main ingredient of the Company’ ice cream is
fresh milk from well-nurtured cows.
2. Involvement in CSR activities. The Company has a foundation for indigent patients.
3. Owners have extensive network in the top class. The Company’s owner is the son of former senator
Ramon Magsaysay Jr. and grand son of former president Ramon Magsaysay.

Weaknesses
1. Products have a short shelf life. To maintain its freshness and quality, the milk used in the Company’s ice
cream are not highly processed.
2. Products are not known to the general public. In the social classes of the Philippines, only Classes A and B
knew something about their products. Very limited advertisement can be noticed for the Company’s ice
cream.
3. Products are expensive. The Company’s products, especially for those with expensive ingredients, are
priced with premium
4. Products are not readily available on recognized distribution channels. Carmen’s Best ice creams are not
available on convenience stores, supermarkets and most common restaurants.
5. Risk of having labor-related issues. The Company encounter a crisis which forced the employees to work
overtime to prevent stock-out costs.

Opportunities
1. Expand its operations abroad. The Company’s operation is only limited to the Philippines.
2. Venture into selling commercialized or low-cost ice creams. Since the Company’s related party is also the
direct producer of its main ingredient, it may easily source its ingredients to produce commercialized or low-
cost ice creams.
3. Venture in to selling healthy variants of ice creams. Non-fat, low sugar, zero sugar may be offered by the
Company to cater the health conscious market.
4. Trend in food delivery mobile application. The Company may explore in the food delivery thru GrabFood,
Food Panda, etc.

Threats
1. Shift of dessert and “cold food” preference to Milk Tea and Iced Coffee. Generally in the Philippines, the
Milk Tea fad is still strongly active in the market.
2. Health consciousness of people. Ice cream is high-fat food. It also contains significant amount of sugar.
 3. Brand loyalty of well-established competitor brands. For competitor brands here in the Philippines, brand
recall is strong for the top three commercialized ice cream brands (Selecta, Magnolia and Nestle). For
international market, since the Company’s brand would be new in the market, potential customers may take
time to recognize the brand.

2. Porter’s Five Forces

Threat of New Entrants: Low

• Difficulty in competing with established brand names such as Baskin&Robbins, Gelatissimo, Caramia,
Dairy Queen, Cold Stone, Carmen's Best, among others.
• Difficulty in sourcing costly premium ingredients, which are primarily being imported from different
countries (i.e. vanilla from Madagascar, Pistachio from Italy, high quality cow’s milk).

Determinants of Suppliers Power: Low

The suppliers to the ice cream industry include dairy farmers and suppliers of various flavorings.
• Although the ingredients are premium and mostly imported, alternative suppliers are abundant in the
foreign market.

Determinants of Buyer Power: Low

• The customers don’t have significant influence over the price of the premium ice cream. It’s a “take it or
leave it” situation.
• The target market is more concern over the goodness of the taste of the ice cream than the price.

Threat of Substitutes: High

• Many substitute products are available within the dessert and frozen food industry (cookies, pies,
popsicles, cakes, milk tea, iced coffee, halo-halo, among others).
• Commercialized low cost ice cream brands such as Selecta, Magnolia and Nestle are powerful substitute
to premium ice cream.

Degree of Industry Rivalry: High

• The principal competitors in the premium ice cream industry are large with significantly greater
resources than Carmen's best.
• Numerous popular competitors exist, including Baskin&Robbins, Gelatissimo, Caramia, Dairy Queen,
Cold Stone, Carmen's Best, among others.

ALTERNATIVE COURSES OF ACTION

1. Focus on Local Marketing Efforts

 Maximize presence in local market

 Tap available ventures such as selling in Tourist Spots, known restaurants, etc.

PROS
a) Established brand for Class A and B
b) Brand maintains prestige, catering mid to high class consumers
c) Family name and network is known and strong locally
d) Untapped opportunities in the local market (e.g. tourist spots, restaurants)
CONS
a) Certain ingredients are not readily available
b) Global market not yet explored
2. Pursue Global Expansion

 Continue expansion in the ASEAN region by increasing brand awareness to Asian Food influencers
 Explore markets outside the ASEAN especially Asia, Middle East and Northern America

PROS
a) Increased brand equity
b) Potential to capture untapped markets outside the Philippines
c) Increased financial benefits
CONS
c) Short shelf life issue
d) Costs to increase capacity
e) Costs to comply foreign regulatory standards and to apply for foreign licenses
f) Logistical complications and costs
g) Increased competition from foreign players (Haagen Dazs, Ben and Jerry’s, Tillamook, Cold Stone, etc.)

RECOMMENDATION AND IMPLEMENTATION

We recommend a 25-year plan consisting of focus on:

1. First five years on the local market

2. Next ten years on the ASEAN market
3. Last ten years on the Global market

Implementation of the recommendation will be as follows:

1. Solidify the local market while establishing reliability of supply.

Since the Company has not yet established the supply chain of its product, which makes them not yet ready for
global expansion.

2. Intensify promotions on tourist spots.

After intensifying the core market, the next focus is on tourist spots, targeting the foreign tourists.

3. Capture Asian Food Influencer’s attention.

Food bloggers become the new influencers in the food industry. It has become a benchmark for people in
considering whether the food are worthy to be tried or not.

In this phase, the Company is to commission internet influencers by inviting them to try their product in the
Philippines and let them write on the Company’s behalf. By this, respective countries of the bloggers can
influence their natives who will visit the Philippines and include in their bucket list the trial of the Company’s
product.

And word of mouth will go on outside the Philippine market.

4. Secure legal rights on brand and formula.

In preparation for going global, the Company should start securing trademark for the brand and patent for the
formula so they can commercialize this.
5. Going global.
Enter into contract with foreign venturers in manufacturing and distribution in other countries.