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Executive summary:

Kwality Walls , a major player in the Ice Cream market the world over started its Indian
operations in the year 1995. With few competitors in the organised market it maintained a
healthy market share and remained highly profitable through the 90s. With rising incomes ,
changing tastes , rejunivated emerging competitors Kwality walls started losing its monopoly
starting early 2002. However it remains a major player in the urban market. Competitors like
Amul ,Vadialal and Scoops followed different strategies to increase their market shares.
While amul focussed in distribution ,visibility and low prices Vadilal focussed on providing
variety to the consumer. Scoops was the first to gauge the rising popularity of Speciality ice
cream parlours and established a chain of stores called as “Temptations”. The net effect was
Kwality Walls being relegated to a market share of just 14% compared to the market leader
Amul 35%.

In order to revitalise the brand Kwality Walls needs to concentrate on increasing its POS in
the urban markets and look to stamp its presence in the rural markets where its presence is
negligible. Overtime KW has been losing its connect with children and it mostly emerged as
an adult brand. It needs to reconnect with this important segment. In addition to cater to the
increasing popularity of parlours and speciality stores KW should increase the presence of its
Swirl stores. Major surveys indicate only 20% of the people are aware of these parlours.KW
also needs to position itself as an alternative to sweets which forms a major dessert in the
country. By doing so it would not only capture market share it could also gain new markets.
It also should look to increase its portfolio of flavours and introduce low end versions at a
lower cost in the rural markets. In addition the company can also look to introduce sugar free
and stamina versions as this is emerging as a major market.

In sum the company is looking to increase its share in the market to atleast 25% in the next
two years apart from establishing new markets and positioning itself as an alternative to
dessert rather than a secondary dessert.
Current Market Situation:

In 2009, the global market of ice creams was pegged at $61.6 billion in terms of
retail value or 15 billion litres in terms of volume. Of this, the Asia-Pacific ice
cream market was worth $13 billion in terms of retail value and 5,128 million
litres in terms of volume. Coming to India, the Indian ice cream industry is
currently estimated to be worth Rs. 2,000 crores, growing at a rate of
approximately 12%. The ice cream market growth picked up after de-
reservation of the sector in 1997.

Ice-cream market in India:

The ice cream market in India can be divided into: the branded market and the
grey market. The branded market at present is 100 million litres per annum
valued at Rs. 800 crores. The grey market consists of small local players and
cottage industry players. In 2008-09, in the branded ice cream market, Amul
held the number one spot, with a market share or 38%, followed by Kwality Walls
at 14%, Vadilal at 12% and Mother Diary at 8%

Indian Ice Cream market can be segmented in three different ways, namely on
the basis of flavours; on the basis of stock keeping units / packaging and on the
basis of consumer segments. On the basis of flavours the market today has a
number of flavours like vanilla, strawberry, chocolate, mango, butterscotch a
number of fruit flavours, dry fruit flavours traditional flavours like Kesar- Pista,
Kaju- Draksh etc. The market is totally dominated by Vanilla, Strawberry and
chocolate, which together account for more than 70% of the market followed by
butterscotch and other fruit flavours.

In rural areas, kulfis / ice creams made by small / cottage industry are popular.
The market for organized sector is restricted to large metropolitan cities. In small
towns and villages, there are thousands of small players who produce ice-
creams / kulfis in their home backyard and cater to the local market. Almost 40%
of the ice creams sold in the country are consumed in the western region with
Mumbai being the main market, followed by 30% in the north and 20% in the

The ice cream industry has traditionally grown at a healthy rate of 12% year-on-
year. The growth in Ice cream industry has been primarily due to strengthening
of distribution network and cold chain infrastructure. Channels such as Mobile
Vending Units have been increasing year on year to reach out to a larger set of
consumers. Besides, consumers also have the choice of trying out varied product
offerings from different brands to keep them excited.

Ice cream distribution in India usually involves a distributor, wholesaler and

retailer. Because of chinks in the cold storage chain, most brands have small
regional operations with production facilities located near major markets.
National brands may opt for cold-storage facilities in major consumption centers
or acquire smaller production facilities close to the retail outlets.

Besides selling their products through kiosks, parlours and push carts, a
significant part of the revenue comes from corporate sales. About 55% of the
business is contributed by exclusive ice cream parlours and kiosks while 30% is
from corporate or food service sales. The rest comes in from retail and exports\

Amul :

➢ Currently the market leader holding a share of 38%.

➢ Rebranded itself in the early 2000s and emerged as a major competitor to Kwality walls.

➢ Has a wide variety of choice in flavours and the type of ice cream.

➢ Has an extensive distribution network spanning the length and breadth of the country in
cohesion with other Amul products. Sample is given below.

➢ The only major player in the industry to have a home delivery option.

➢ Has a wide network of exclusive parlours catering to ice creams and other Amul products in
off season thereby sustaining itself in those periods.

➢ The only player to have a sugar free version of its products.

➢ Priced marginally lower in most markets. Price sensitive customers are lost here.
➢ Research indicates a marginally better performance of Amul with regards to availability and
taste in major flavours. However Kwality Walls performs better in speciality and premium ice

➢ Has a major presence in rural India unlike Kwality walls. This is a major differentiator.

➢ Also started the first ever fitness candy in India. Although not a major success it gained a lot
of visibility in terms of television and media reports as well as word of mouth.

➢ Also has a version of Ice cream called probiotic Ice cream catering to the health conscious.

➢ In addition has a total of 74 varieties of Ice creams.

➢ Has an emotional connect with most Indians as an Indian brand. This attracts people in the
age groups of 30-60.

➢ Has plans to open 20000 new outlets across india with a major chunk being in north east
which is still a relatively untapped market.


➢ Have a market share of 18% across India.

➢ Offer the widest range of ice creams in the country with 120 plus flavours.
➢ To meet with the consumer demand on regular basis, they introduce new
flavours for different segments of customers throughout the year.
➢ Have a chain of ice cream parlours called ‘Happiness parlours’ where
customers can relish their complete range under one roof.
➢ Have a Cold Chain network compromising three manufacturing plants,
more than 500 distributors and over 40,000 retailers.
➢ Promote their brand through various ways such as Advertisement,
Sponsoring events and print media.
➢ Have a strong sales network team which generates sales through retail
outlets, institutions, Hotels & restaurants, Functions.
➢ Follow the given distribution network: Plant - C&F – Distributor – Dealers –
➢ Provides distributors with deep freezers for storage of ice creams, display
sign boards and other promotional activities that helps in boosting

Marketing Strategies:


Traditionally Kwality walls has always demanded a price which is slightly higher
than its major competitors. This worked well until early 2000s when Kwality Walls
was the single most prominent player. However the trend has been changing
with the entry of other players and the rejunivation of other players such as
Amul and Vadilal. As shown in the competitor analysis they have come out with
major changes and in most cases completely rebranded themselves. As such
there is a need to revisit the price points as far as Kwality walls is concerned.

Consider for example Cornetto which is one of the major selling ice creams
charges a price of 35 rupees. A similar ice cream can be bought for 22-25 in
Amul .Most ice cream consumers are price sensitive which would result in a loss
of sales which was seen in the case of Cornetto where its share has fallen from
60% to 42%.At the same time the share of Amul has risen by 20%.

The following are some of the strategies suggested.

➢ Review the price points of products where there has been a decline in the
sales. Gauge the impact and then decide on the future course of action for
the other products as well.

➢ As major surveys indicate rural consumers are extremely price sensitive

hence look to have a de centralised pricing policy and if required introduce
lower variants of the present products.
➢ If cost cutting is not possible in the present scenario ,Kwality walls should
look to leverage on the extensive distribution network of HUL which it
currently is not using to the fullest extent possible. This would result in a
lot savings , part of which could be transferred to the customers.


Kwality walls is one of the most visible brands in the ice cream industry. Most
major surveys indicate a 65% initial recall for Kwality walls compared to meagre
amounts for its competitors. However it has not been able to translate it to its
advantage because of certain reasons. It isn’t available as extensively as other
competitors. Ice cream is mostly an impulsive buy in most cases and as such the
distribution and availability plays a huge role in such buys. In the survey that we
have conducted and normal research KW isn’t available as extensively as Amul
is. Amul takes advantage of its extensive network while KW has not been able to.
Amul currently has 70000 retail outlets across the country compared to 35000 of
Kwality Walls. Another factor here is that Amul is spread across the country
wheras Kwality Walls only has presence in the major 23 Towns and Cities in the
country apart from a negligible presence in the rural sector.

Increasing availability in urban areas is something KW must seriously look into.

Railway stations are a major source of sales which KW has been ignoring thus
far.A major change that has taken palce in the market in the last decade has
been the opening up of speciality stores and parlours. For example Scoops Ice
cream which had a market share of 15% in the early 2000s was the first one to
gauge these changes and established a chain of speciality ice cream parlours
named “ Temptations”. It catered to the at that time newly emerging ultra
premium segment and also the premium segment. Scoops now sees the fruits of
that investment. It is now a major player in the south which was earlier its lowest
market. It is now expanding similar stores in the west starting with Mumbai.In
addition to Temptations there is also the presence of baskin Robbins ,Italian
Gelato and Nirula which is adding to the woes of Kwality Walls. Most of the
premium catergory sales take place in the Urban areas and this is the major
market for Kwality walls.Its major competitor Amul too has a chain of parlours
across the country.

Kwality Walls did toy with the idea of similar retail stores in India as well. It
started a chain of parlours called as “Swirl” which has been successful in other
countries but not in India wheras other similar kind of parlours have been
successful. Kwality Walls need to revisit the the idea and ensure success as this
has become a major lifestyle trend. Baskin Robbins had similar problems but
they stayed on and are now experiencing huge profitability. Swirl though
successful in major areas hasn’t been taken up on a more extensive basis by
Kwality walls. There are only 85 Swirl Outlets in the country .
Another feature Kwality walls should seriously consider is the option of Home
delivery which has been successfully implemented by Amul. The users can log on
to Amul website and get the ice cream of their choice delivered at their door step
free of cost.

Kwality Walls has been a heavy spender on advertising throughout since it

entered the Indian market in 1995. Advertising has been the mainstay of its
promotions most of which is through Television Ads. Advertisements in print
media and on hoardings come a close second. Kwality Walls has always focussed
on the Youth as its main target segment. All its ads and campaigns have been
aligned towards them. They have used Cornetto to heavily connect to the
segment. Campaigns such as Cornetto Blind Date and their association of
Cornetto with Oxigen are such examples of the same. The blind date campaign
gave the consumers a chance to go on a date with celebrities and the latter
awarded cash points that could be redeemed for gifts or articles. Both the
campaigns did well with the youth.
Ice Cream has traditionally been thought of as a item that is heavy on calories.
Major consumers of ice cream form a part of the urban market. Hence, Walls
needs to promote to negate this belief and assure the consumers of it being
health friendly given that urban people are increasingly becoming health
conscious. Coming up with sugarfree alternatives would be a good option.
Setting up live kiosks at airports, stations, malls, theatres, etc where in
consumers could be made aware about the same will work in their favour. Not
only would consumers’ apprehensions reduce but also walls would gain the first
mover advantage.

Kwality Walls firstly now needs to focus on the kids segment. 50 % of the sales
are on impulse and can be attributed to kids and youth while family sales
contribute 35% and parlours manage a 15% share. Hence Kwality Walls needs to
target them using exclusive tie ups with schools, colleges and having sales
promotions at malls, theatres and parks where most kids are expected to visit.

Ice creams till now have been thought to be a delicacy that is eaten normally as
a desert or in summer time. This pattern needs to be changed.Ads should be
made portraying it as a all season delicacy which can be had anytime.

While Kwality Walls has a good visibility in the urban areas, in rural locations the
company faces a identity crisis. Either people are not aware of the brand or it is
perceived to be too costly. People here prefer to go for Amul or Vadilal rather
than Walls. Hence, Walls needs to produce some special products for these areas
and come up with Below the Line activities to increase consumer awareness in
rural locations. Supplying ice creams on major occasions such as Diwali, Holi,
Ganesh Chaturthi and others could work well in the favour of the company which
would be seen as a company that understands local flavour and sentiment.

The new generation is tech savy and spends a major part of their time on Social
Networking sites such as Facebook and Orkut. Walls can have dedicated online
events and contests that would increase awareness among consumers.
Uploading periodic product launches and details on the website would help the
product to reach to greater number of people. Cashing in on the growing
popularity of Youtube there can be some video contests asking people to
describe why they like a particular Kwality walls product.

Unlike most other FMCG products Kwality Walls has hardly had any prolific Brand
Ambassador. Just like Amitabh Bachchan worked wonders for Cadbury, a good
Ambassador might do the trick for Kwality Walls. Amul with its tag like is
perceived to be the taste of India. Walls using an Indian icon may be able to
prove its Indian connect and touch to its customers. Kids and youth emulate
icons and hence this would prove to be a plus for the company.

Alternatively it could also use a character or cartoon to portray itself. We all are
aware that kids are fond of cartoons and somewhere inside adults also connect
to them. Hence, Walls could make use of a fictional character to differentiate
itself from the competition. Vodafone did it successfully with ZooZoo. It may
work well for Walls too.


Kwality Walls has always been synonymous with Cornetto and it is no wonder
that it is the single most biggest seller from kwality walls. It is hard to find any
other product from KW which commands the same sort of market.Vadilal which
has been increasing its market share steadily has around 100 flavours and kinds
of ice creams to choose from. Even Amul has over 100 varieties of Ice creams.
KW on the other hand has only around 50 varieties of Ice creams. Thought most
of these varieties are not sold in huge quantities the company stands to lose
customers if a particular flavour or kind of ice cream of a particular consumer are
not available. This will have a huge impact on the overall share in the market in
the long run.

Also as evinced previously KW has negligible presence in the rural markets. This
sector is led by Amul and other local dealers. Most unorganised players are
found in the rural markets. This presents a huge opportunity for KW if they can
introduce new varieties of ice cream catering to the local preferences and at
competitive prices. Lower versions of present products might also work. For
example family packs which are usually sold around 1 litre can be sold at 200 ml
and 500 ml packs.In places like Gujarat havmour has an impressive share
because it caters to the local tastes which is not he case with KW. By entering
the rural markets as well KW can gauge the performance of its new products and
also steadily increase its share in the market in the long run.

Amul is currently the only brand in India which caters to the sugar free versions.
With almost 50% of the diabetic population in the world present in India, this is
too large a market to be ignored. Amul has successfully launched its sugar free
version and has been clocking impressive sales figures. It also introduced an
energy ice cream called Stamina primarily targeting the athletes and health
conscious people.KW should seriously consider targeting this segment and in
addition it can also launch a Diet-Ice cream as was seen by
Coke when it launched Diet Coke. Though initially tragetted at health conscious
people it eventually became a lifestyle statement.

In addition there is an increased interest towards speciality Icecreams which can

be catered to in the swirl stores. The selection of ice creams available and
flavours can be substantially increased to cater to the changing tastes.

In a country like ours where there is a huge selection of sweets available as

desserts ,Ice creams have always found it difficult to replace them as the
primary dessert. Increasingly Ice cream is being had in addition to a sweet. KW
can tap this by launching a product which combines sweet with an Ice
Cream.This combination of Ice cream with a sweet is extremely popular among
south Indians.

Financial Projections:

Considering a total of 23 major markets in the country,10 of them tier 1 cities

and 13 tier 2 and 3 cities we are looking to set up 20 parlours in each tier 1 and
10 parlours in tier 2 cities. Considering each tier 1 city would entail a set up cost
of 5 lakhs and a running cost of 1 lakh per month. In tier 2 cities the set up cost
would be 3 lakhs and a running cost of 50 thousand. Total entailment is

10*20*5,00,000+13*10*3,00,000= 4,90,00,000. ( Set up cost)

10*20*100000*12+13*10*50000*12= 19,80,00,000( Rental and running cost

per year)

On an average Ice creams have a margin of 50% in the speciality versions.

Assuming each store operates for 12 hours with more customers coming in the
evening there are an expected 360 customers everyday. Assuming an average
of 50 Rs per person this would generate a revenue of 360 persons*50 rupees*30
days*330 parlours* 12 months= 213,84,00,000.

We get a margin of 50% in it. Net revenue= 106,92,00,000.

The above calculations are a best case scenario for KW where the parlours gain
immediate support and are successful. Considering a case where they are
moderately successful and assuming a footfall of 50% of the above calculations
it would still generate a margin of around 53 crore.
In addition KW is also looking to improve its reach to more 35000 retail stores
with a majority of them in the rural areas. Assuming we provide a refrigerator to
50% of them costing 15000 this would entail a total cost of


This would result in increased sales by 20%. KW currently has sales of 14% of
the 250 Mn dollar ice cream market in India. After this the total would be around
18% of the market. In addition we also have an additional sales of 106 Crores.
The net effect would be an increase in the market share to 23% at the minimum.

The brand ambassador has to be someone who has a keen following among
teens and kids and at the same time the younger generation ie,, the age group
of 20-28 which has become a major segment for ice creams. Ranbir Kapoor
would be an ideal choice for such a scenario and going by his current prices it
would entail a cost of 1.5 crore per year.In addition all the other promotions
included would entail a cost of around 5 crore and if successful should result in
an increase in market share by atleast 3-4%.


➢ Increase the market share to atleast 22% in the next one year and 25% by
the next year.
➢ Establishing Kwality walls as a major player in the rural markets where the
majority of the 45% of urorganised market exists.
➢ Increasing the share in the southern states to atleast 30% wher the per
capita consumption is the lowest.
➢ Establish Ice cream as a popular alternative dessert to sweets rather than
a secondary replacement.
➢ Increase the POS density in tier 1 and tier 2 cities.

Challenges and Opportunities:

The per capita consumption of ice cream in India is approximately 300 ml, as
against the world average of 2.3 litres per annum. Vanilla, Strawberry and
Chocolate together constitute approximately 60% of the market. The per capita
consumption of ice creams in India is just 300 ml per annum, compared to 22
litres in the US, 18 litres in Australia, 14 litres in Sweden. Having said that the Ice
cream sector is witnessing a growth of CAGR of 18% per annum.

Indian cuisine has a huge range of desserts in its mix. Ice cream always
competes against these for attention. Besides desserts, ice cream also vies for
attention with other like foods for example in summers with cold drinks, coffee,
juice, etc.

Another trend that is witnessing a change is the seasonal nature of the industry.
Having said that, the peak season for ice cream still remains the summer months
of April-June and dips in the months of November-February. According to the
industry players, this trend especially holds true for the North and the Western
parts of India. The variation in sales for Kwality Walls can range from 15–30%
from season to off season depending on geography and brand.

There are several challenges that affect the industry adversely. The industry
players not only face competition from their competitors, but also from other like
foods. Though changing, consumers still consider ice cream as a dessert and a
side item. Moreover, of the ice cream consumption in India, nearly 60% is
accounted to by three flavours of vanilla, strawberry and chocolate. And to be on
the safer side, major players tend play around these flavours only. For big
players, regional competition from smaller players is another major issue. High
tariffs and inefficient distribution systems will continue to bottleneck the import
market for the short term.

Another major problem faced by the industry players, especially while expansion,
is poor infrastructure such lack of cold storage and in case of rural penetration,
even erratic power supply becomes an issue. This is especially true for big
players. Besides the presence of other players, another hurdle is the high rent
charged for floor space, especially in malls. This also becomes a problem when
companies try to expand.