AMITY UNIVERSITY UTTAR PRADESH (AUUP)

A CONSULTING REPORT ON
“CONSULTING FOR BEN & JERRY’S MARKET
ENTRY STRATEGY IN INDIA”

SUBMITTED TO: SUBMITTED BY:

MS. ;;;;;;;;;;;; SURAJ KUMAR
SUBMITTED ON:
Academics Dept. (ABS) A01XXXXXX
XXth March, 20XX
SUBJECT – MASEEI Section ID- X/XX

MBA-Gen, 20XX-XX
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S.K. CONSULTING

INDIA ENTRY
STRATEGY
A STEP BY STEP APPROACH
PREPARED BY: Suraj Kumar

20XX

Prepared For:
Ben & Jerry’s Homemade Inc.
USA

SECTOR-125, NOIDA, INDIA

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DISCLAIMER
This report was prepared as a private communication to client and was not intended for public
circulation or publication or for the use of any third party, without the approval of S K Consulting Pvt.
Ltd. While this report is based on information from sources which S K Consulting Pty Ltd considers
reliable, its accuracy and completeness cannot be guaranteed.

Any opinions expressed reflect S K Consulting Pvt Ltd judgment on this date and are subject to
change. S K Consulting Pty Ltd has no obligation to provide revised assessments in the event of
changed circumstances. S K Consulting Pvt. Ltd., its directors and employees do not accept any
liability for the results of any actions taken or not taken on the basis of information in this report, or
for any negligent misstatements, errors or omissions.

This report is made without consideration of any specific client’s investment objectives, financial
situation or needs. Those acting upon such information without first consulting one of S K Consulting
Pvt. Ltd. investment advisors do so entirely at their own risk. It is recommended that any persons who
wish to act upon this report consult with an S K Consulting Pvt. Ltd. investment advisor before doing
so. This report does not constitute an offer or invitation to purchase any securities and should not be
relied upon in connection with any contract or commitment whatsoever.
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TABLE OF CONTENTS

DISCLAIMER................................................................................................................................................... 3
TABLE OF CONTENTS..................................................................................................................................... 4
EXECUTIVE SUMMARY .................................................................................................................................. 7
INTRODUCTION TO THE REPORT .................................................................................................................. 9
Internal Analysis .................................................................................................................................. 9
External Analysis ................................................................................................................................. 9
PURPOSE ..................................................................................................................................................... 11
PLAN OF ACTION ......................................................................................................................................... 12
Market Exploration Phase................................................................................................................. 12
Strategy Formulation Phase .............................................................................................................. 13
Strategy Implementation Phase ....................................................................................................... 13
BACKGROUND ............................................................................................................................................. 14
Why India? ........................................................................................................................................ 14
Present Scenario ............................................................................................................................... 14
The New Indian Consumer................................................................................................................ 15
Industry Growth ................................................................................................................................ 15
Trends Driving Growth in Industry .................................................................................................... 16
Challenges ......................................................................................................................................... 17
Industry Trends ................................................................................................................................. 17
Recent Development in Ice-Cream ................................................................................................... 18
A LOOK AT OUR CLIENT............................................................................................................................... 19
History ............................................................................................................................................... 19
Timeline............................................................................................................................................. 19
Size of Operations ............................................................................................................................. 20
Management Style ............................................................................................................................ 20
Key Executives................................................................................................................................... 20
Mission .............................................................................................................................................. 21
Activities ............................................................................................................................................ 21
Locations ........................................................................................................................................... 22
Recent Happenings ........................................................................................................................... 22
Products ............................................................................................................................................ 23
THE BUSINESS AND MARKET ENVIRONMENT............................................................................................. 24
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Ice-Cream ???.................................................................................................................................... 24
History of Ice-Cream ......................................................................................................................... 24
Global Ice-Cream Industry ................................................................................................................ 24
Indian Ice-cream Industry: An Overview .......................................................................................... 25
Ice-Cream Consumption ................................................................................................................... 25
Market Segmentation ....................................................................................................................... 26
Product Flavors ................................................................................................................................. 27
LEADING PLAYERS ....................................................................................................................................... 28
Amul India Ltd. .............................................................................................................................. 28
Uniliever’s Kwality ......................................................................................................................... 28
Vadilal Ice-Cream Ltd. ................................................................................................................... 29
Mother Diary Ltd. .......................................................................................................................... 30
Dinshaw’s Ice-cream ..................................................................................................................... 30
Top ‘N’ Town ................................................................................................................................. 31
Baskin-Robbins .............................................................................................................................. 31
Cream Bell ..................................................................................................................................... 31
Havmor.......................................................................................................................................... 31
Nirula’s .......................................................................................................................................... 31
Arun Ice-creams ............................................................................................................................ 31
THE COMPETITION ...................................................................................................................................... 32
Threat of New Entrants ..................................................................................................................... 32
Powers of Buyers .............................................................................................................................. 33
Power of Suppliers ............................................................................................................................ 33
Availability of Substitutes ................................................................................................................. 33
Competitive Rivalry ........................................................................................................................... 33
Current Strategies of Ben & Jerry’s ................................................................................................... 34
Future Strategies ............................................................................................................................... 34
The Ben & Jerry’s Ice-cream SWOT Analysis..................................................................................... 35
Strengths ........................................................................................................................................... 35
Weaknesses ...................................................................................................................................... 36
Opportunities .................................................................................................................................... 36
Threats .............................................................................................................................................. 36
Future of ice-cream Market in India ................................................................................................. 37
Regulatory Environment ................................................................................................................... 37
Industry Standards ............................................................................................................................ 38
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Legal Framework ............................................................................................................................... 38

Labeling Requirements ..................................................................................................................... 38
Cross Border Risks??? ....................................................................................................................... 39
STRATEGIES FOR SUCCESS .......................................................................................................................... 40
Task One: Developing a Marketing Plan ........................................................................................... 40
Potential Sales ................................................................................................................................... 40
Primary Research Survey .................................................................................................................. 40
Seasonality of Sales ........................................................................................................................... 41
Consumption Process of Ice-Cream .................................................................................................. 42
Task Two: Designing and Administering a Marketing Plan ............................................................... 42
Learning Indian business culture .................................................................................................. 42
Business Culture ............................................................................................................................ 43
Choosing Appropriate Entry Strategy ............................................................................................... 43
Situation & Road Ahead .................................................................................................................... 43
Immense Cultural Distance with India .......................................................................................... 44
Premium Positioning in India Also ................................................................................................ 44
Localized Products for the Indian ................................................................................................. 44
Promotion using Indian Celebrity Endorsements ......................................................................... 44
Who can say no to an ice- cream? ................................................................................................ 45
Distribution Channels........................................................................................................................ 45
Retail Channels.................................................................................................................................. 46
Leading Retail Companies ................................................................................................................. 47
Task Three: Identifying and Evaluating Alternative Locations .......................................................... 48
Price and Profit Margin ..................................................................................................................... 49
Franchising Profit .............................................................................................................................. 49
SUMMARY & CONCLUSION......................................................................................................................... 52
REFERENCES ................................................................................................................................................ 54
BIBLIOGRAPHY ............................................................................................................................................ 55
Print Sources: .................................................................................................................................... 55
Digital Sources:.................................................................................................................................. 55
APPENDIX A: INVOICE ................................................................................................................................. 56
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EXECUTIVE SUMMARY
Multinational enterprises (MNEs) are increasing their presence in the lives of more and more
consumers as companies seek to expand and promote their products to a still wider range of markets
globally. As markets change and develop, so does the strategy used to enter them, and companies
must be able to choose the correct way to enter markets in order to remain competitive.

India provides both challenges and unprecedented opportunities to most international businesses
coming to India. India is the 4th largest economy, in terms of purchasing power parity and has the
highest rates of returns on investment. Profitability of US investments in India: 19.33% in 2000
(Source: US Department of Commerce). While the success stories are plenty, there are also many
precedents of foreign companies losing millions if not billions of dollars.

To assess the feasibility of entering into ice-cream business, we have combined primary sources like
consumer and trade visits, and secondary sources like earlier research reports to understand market
construct, market characteristics, and target consumer groups of the ice-cream industry. Based on the
collected data, and then assessed the entry prospect for Ben & Jerry’s in this industry.

The lucrative nature of this business has created strong opportunities in the market Ice-creams can be
ramified into impulse, take home and artisanal segments. Of these, impulse segment entails highest
sales volumes as featured products are small in size, relatively cheaper and can be consumed at a go.
Availability of impulse products has increased as push carts are present across cities and towns and
affordability has contributed to further growth in such buyers.

Rise in buyers of impulse products gets translated into higher sales of such products thereby
accounting for growth of the total market. Another chief stimulant in this sector is the strengthening of
distribution network. As players worked towards bolstering distribution system across the country,
availability and coverage has increased. As products came within the reach of consumers and players
targeted enhanced coverage, sales inadvertently received a boost. Coverage, availability or even
affordability has been complemented by the rising purchasing power among consumers. Ice-creams
are at times referred to as luxury products and purchases of such products would be affected with the
rise in disposable income.

Further, per capita consumption of ice-creams in India is low compared to other countries across the
globe. This poses as a latent opportunity for the sector as there is potential for further growth.
However, the sector is also facing certain challenges. Factors such as rise in input costs, erratic power
supply across the country and rise in local manufacturers pose as impediments for this sector.

Government participation in this sector covers Prevention of Food Adulteration Act 1954, Food and
Safety Standards Act 2006 and certain government policies. The major trends identified include rise
in frozen yoghurt, creation of exclusive stores, entry of eatery players, establishment of the Indian Ice-
cream Manufacturers’ Association, promotional offers flooding the sector, mini meal concept,
alternative products and introduction of new variants.

The ice-cream industry in India is in many ways, reflective of the overall population distribution. The
country’s population is primarily rural with approximately 65% of the population living in villages
with a population of less than 5,000; this means there are well over 150,000 villages with a combined
population in excess of 650 million. This has contributed to a highly fragmented industry that by
many estimates has over 70,000 ice-cream entities. Many of these are single family operations where
the product is made either in the home or in very small factories and sold on the streets. The 350
million remaining people are concentrated in the cities where the industry is reasonably concentrated
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in the hands of a few international and domestic firms. It is estimated that only 30% of the entire
market is “organized” and the industry meets the classic definition of a fragmented industry, that is,
one where there is an absence of market leaders with the power to shape industry events.

The market is characterized by low competitive rivalry where urban areas still contributes to more
than 61% of total country’s sales. This is due to issues regarding electricity and requirement of cold
distribution chain by the industry. There are still huge untapped areas of the country. However, the
industry is extremely capital intensive and there are lots of entry barriers. Only manufacturers with
large capital can invest and thus there has been no big player in the common format segment except a
few.

Products are of quite high quality in the Indian market but price is still out of reach of rural and lower
SEC people who belong to low disposable monthly income group. Distribution is mainly done
through refrigerated trucks alongside use of carts in the country. Boutique format players serve at
their premises, ice-cream and other dessert items to offset seasonality of ice-cream sales. Promotion in
the common format is mainly in newspapers and billboards along with trade based consumer
promotions and trader schemes.

Consumers of ice-cream are mainly Urban kids in the age group of 5-14 who mainly consume normal
sticks, cups, cones innovative fillers and water ice-creams; there is urban youth in the age group of
15-24 who consume premium and extrusion sticks and cones and urban mothers in the age group of
25-35 who are the decision makers for kids and family ice-cream purchases.

The consumers can be segmented based on their desired satisfactions from ice-cream occasion,
portrayed personality traits of ice-cream bands and the occasions when they consume ice-cream.
Analysis shows there is scope for market development and penetration in the country. There is also
scope for ice-creams that are health conscious and nutritional in the industry.

Looking at the scenario of the Indian market, Ben & Jerry’s is suggested to enter the industry in a
grand way with tentative initial investment of Rs. 130 Crore in manufacturing facility, cold
distribution channel development and placing branded freezers at retail outlets. Company is also
suggested to enter in the boutique segment with Kwality the premium boutique brand of Unilever.
Products should be differentiated and nutritional with the price range at par or higher than common
format players and lower than the boutique format. Extensive promotion would be required and thus
presence in television as ice-cream is a brand that requires continuous innovation and hype around the
brand.

Expected outcome of the entry is to have sales of RS. 25 Crore with a market share of 7% in the first
year. However, for the first three years company would have negative net profit and is expected to
make a net profit of RS. 6 Crore with gross sales of RS. 56 Crore in the fifth year of business.

Thus, Ben & Jerry’s can benefit from entering in this industry if they enter in a grand way. Obviously
company has to balance the investment issues for the industry and also acquire necessary resource for
ice-cream. If they can address these issues tactfully they can do well leveraging their existing brand
image.
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INTRODUCTION TO THE REPORT

This report sets out to evaluate & analyze the US ice-cream manufacturer– the Ben & Jerry’s viable
strategy to enter in India’s ice-cream market. It uses SWOT analysis approach to analyze the
company’s strengths, weaknesses, opportunities, and threats. The report has identified a general
marketing entry strategy which will help the company develop new market effectively. It contains the
introduction of the Ben n& Jerry’s company in brief, the Indian ice-cream market, the SWOT analysis
and the suggested marketing entry strategy.

The report begins with an overview of the ice-cream industry in India providing the market size and
growth as well as information regarding its consumption pattern and market structure. This is
followed by a primary segmentation of the industry wherein a product mix is highlighted. An
overview of the ice-cream market provides an introduction to the sector and covers the market size
and growth in India along with a representation of the market share of key players in the sector.

An analysis of the value chain has been included which is followed by a snapshot of the various
distribution channels players opt for in the ice-cream market. Trend over a period of four years is
included which precedes a Porter’s Five Forces analysis that concludes the section. The next section
highlights the segmentation in the ice-cream market and all three primary segments namely impulse
segment, take home segment and artisanal segment have been discussed.

An analysis of the drivers explains the factors for growth of the market and includes lucrative nature
of business, rise of buyers in impulse segment, strengthening of distribution network, increase of
disposable income and low per capita consumption of ice-creams. Ice-creams contain air in a
substantial amount sometimes even up to 50% which makes the business a very profitable venture
wherein profits margins are extremely high at certain times.

Internal Analysis

• Most of the newly launched product or services fail due to improper analysis of their internal
and external needs.
• Since internal analysis is so useful and the life cycle as well as pricing is depended upon this
analysis.

Points under internal analysis

• Raw material requirement

• Power supply
• Labor requirement
• Working force Capital
• Working capital
• Internal rules and regulations
• Proper management
•

External Analysis
Customer analysis
• customer mindset
• loyalty status for different brands
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Competitor’s analysis
• market share
• the advertisement and promotional share
• current market positions of all the players

Environment analysis
• high initial launch cost
• market research
• marketing driven
• brand equity
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PURPOSE
Ben & Jerry’s Homemade Inc is aspiring to expand its operation in India and generate more revenue.
It has seen the emergence of a supper crowd, and the growth of a health-conscious segment amongst
the student and staff population. It has also observed that amongst the range of offered product,
Cherry Garcia and Chocolate Chip Cookie Dough Ice-cream have far greater demand and potential
for revenue making than the rest. To capitalize in these opportunities, Ben & Jerry’s Homemade Inc
need to device strategies to enter Indian market and to attract these new customer groups to suffice the
goal of expansion.

However, Ben & Jerry’s Homemade Inc currently lacks knowledge, the resources to support any plan
that exploits the above opportunities. As such, the business requested for a consultation service to help
Ben & Jerry’s Homemade Inc create a platform to take advantage of its global brand name, unique
product range and expand its business and attract new customers. This would include the creation of a
new business model, the invention of entry strategy, understanding the market and the customers and
a marketing strategy including branding, product differentiation and supply chain management.

The scope of the requested consultation service can be summarized by the following:

1. Developing strategic fit of the new entry opportunity under consideration and aligning with
your overall strategic direction and business plan.
2. Finding answers for questions like- What is the true size of the ice-cream & dessert market in
India? How fast is it growing? Where is it in its lifecycle? How intense is its competition?
Who will be your direct and indirect competitors? How much of the market you can expect to
capture? How profitable this market would be to you and under certain conditions assumed
when you will be able to break even?
3. Identify the targeted customers, analyze their needs and design the strategies which generate
values that match their expectations.
4. Finding out- What would be the key determining factors of successful entry? What
investments would be required? Any barriers you would be required to overcome? These all
factors will help you out to assess how attractive the opportunity of entering India is on the
lines of your goals, capabilities, constraints and other available investment options?
5. Develop a new system of operation in order to achieve greater economical values and gain
higher level of customer satisfaction.
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PLAN OF ACTION

After going through the challenges you are facing we are happy to extend our expertise and assist you
in understanding all the intricacies involved in getting successful entry into ice-cream & dessert
market which is very attractive and lucrative with immense potential in urban India. The consultancy
project will be completed in following three phases.

• Market Exploration Phase

PHASE 1

• Strategy Formulation Phase

PHASE 2

• Strategy Implementation Phase

PHASE 3

Market Exploration Phase

In the first phase, we will explore the ice-cream & dessert market in India with our in-house research
team and gather market intelligence to come out with the best market approach for you- in terms of
the opportunities and their scope in the Indian market. At SK Consulting, we provide our clients with
fast and cost-effective market-exploration services. Backed up by practical experience and knowledge
on the ground, we come up with new and innovative solutions which not only answer your questions
on the competition, technical barriers, pricing and distribution channels, but also provide you with
qualified business leads and partners.

Activities to be undertaken:

1. Identifying potential customers and business leads (Through primary in-depth field
interviews).
2. Identifying technical barriers in the new market.
3. Identifying competition in the market through detailed competitor's analysis. Market size.
4. Alternative sales & distribution channels.
5. Identifying possible partners. And Location Analysis.
6. Analysis of product portfolio to be launched and pricing vis-à-vis of competitors.
7. Examination of Government Regulations.
8. Consumer demographics, consumer behavior (Usage and Purchase Frequency), Brand
Loyalty Aspects within segment & attitude towards ice-cream segment.
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Strategy Formulation Phase

We provide a complete go-to-market strategy with our recommendations on product, pricing,

positioning and segmentation. Based on the India Entry option selected by the client, we will help in
preparation of a joint Business Plan. Strategy formulation is the process whereby appropriate courses
of action are determined so as to achieve organizational objectives and thus, accomplishing
organizational purpose." Formulation of effective strategies goes a long way in the success of a
company in a new market. With the results derived in "Market Exploration", our professionals assist
clients in defining appropriate Indian Entry Strategy options. Our strategy document generally
includes recommendations on product, pricing, positioning and segmentation, besides one of the
following India entry options:

1. Greenfield Operation through wholly owned Indian subsidiary.

2. Acquisition of Indian Target Company.
3. Joint Venture.
4. Selecting the Right Partner for Distribution, Contract manufacturing or sourcing.

Once the client selects India Entry Option, we help in preparation of a joint Business Plan.

Strategy Implementation Phase

We believe that the merit of a strategy lies in its implementation. Here we perform the crucial action
of putting into shape the formulated strategy. After Market Exploration and Strategy Formulation,
comes the turn of Strategy Implementation. Successful Implementation of the formulated strategies is
essential for the success of the business in a new market. And for a successful implementation, you
need a partner who is equipped with an in-depth knowledge of the market and this is where, SK
Consulting helps you with:
1. Incorporation of the Indian entity.
2. Commence Acquisition or Set-up Greenfield facility.
3. Seeking all regulatory approvals from Central and State Government Bodies.
4. Selecting and acquiring a suitable site in case of Greenfield operations.
5. Brand Communication and Promotion (Various ATL & BTL activities to be undertaken).
6. Retail store format & plan to implement.

With over 26 years in the business, SK Consulting has served over 450 clients across the globe. Our
professionals have helped many companies leverage the India Advantage and assist them in
successful implementation of strategies and thus, reduce entry risks and compress gestation time for
profitability.
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BACKGROUND
Being a tropical country and one of the leading producers of milk in the world Indeed it has been quite
a paradox that India‘s ice-cream market suffer from low demand. The per capita consumption in India
300 ml has been much lower compared to the other countries (23 lt in the US, 18 lt in Australia, 14 lt
in Sweden and 800 ml even in neighboring Pakistan) India shows immense potential for expansion.
The US has been the leading producer of ice-cream in the world albeit Europe introduced the product
into the country.

The unorganized market has dominated this sector for the past several years with an enviable cost
advantage. Things have changed with the entry of organized players in respect of product variation,
innovation and mix. It is one of those markets which offer high returns with a minimal investment.
But the market is plagued by certain inherit problems which need to be addressed on war footing. This
segment of the paper takes stock of Ice-cream market in light of the growth, competition and market
segmentation.

Why India?

• India is world's 10th largest economy- and the third largest in Asia behind Japan and China.
• It is the 4th largest economy in the world in terms of PPP.
• There is a large and growing middle class of 325-350 million with an average yearly income
comparable to $25,000 in purchasing power in the United States.
• Almost 60% of the population (564 million) is under the age of 20.

Present Scenario

The market for Ice-cream in India increased during 2002-2007, growing at an average annual rate of
6.9%. The leading company in the market in 2007 was GCMMF (Gujarat Co-operative Milk
Marketing Federation Ltd). The second-largest player was Unilever with Mother Dairy at third place.

Not a single multinational brand has been able to make its presence felt in ice-creams in India as the
market continues to be ruled by Indian brands such as Amul, Kwality Walls, Mother Dairy, Vadilal
and several regional ones such as Dinshaw in the West and Arun in the South.

The over pricing of the product by Swiss brand Movenpick had not been able to make any dent in
India. The product is now being distributed through third party arrangement still brand suffers low
visibility. Though Nestle SA had bought it but Indian operations do not handle Movenpick. So is the
case with other MNC’s such as Baskin Robbins, Haagen-Dazs and Blue Bunny. All this point to
economies of scale enjoyed by Indian brands over the transnational companies.

The French major Candia which owns Cream Bell Brand was wise enough to follow competitive
pricing when it entered in India through joint venture. It took some time to reap the economies of
scale and recently expanded in different parts of India by acquiring national status. Needless to say in
fairly quick time it has become 5 top brands across India and giving tough competition for the local
brands. R&D and Quality control. The innovation that is happening in developing new products,
packaging and communication show the growing commitment to reach the final consumer.
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The New Indian Consumer

• ‘India leads Asia-Pacific in consumer confidence. Indians also appear to display the highest
degree of confidence in their economy than consumers in other Asia-Pacific countries.’-
Business Standard, 2011.
• “A new breed of consumer in India- young, increasingly wealthy and willing to spend on
everything from mobile phones to speakers to French fries.”–Time Magazine, 2012.
• Getting Richer……
- Emerging Industries like Retail Chains and Call Centers making young adults richer.
- Middle class has grown by 17% in 3 years.
• …Younger…
- Young adults command $10.5bn in cash to burn.
- Spending of college graduates is growing at 12% twice the rate of the GDP.
• …Credit Friendly…
- Personal Credit disbursed has increased to Rs. 660,000 Cr in 2010 from Rs. 50,000 Cr in
2000.
- 12% people in Urban SEC A/B are currently EMI’s for loans, of which 40% have taken
home loans.
• …and Indulgent
- Growing Income and Easy availability of finance have promoted heavy spends in capital
items like House, Vehicle, Consumer Durables, Jewellery
- Consumer no longer believes in ‘saving to buy’. (Source: Time Magazine, 2004 & KSA
Technopak Consumer Outlook 2004).

Industry Growth

Since 1996, the share of ice-creams in the processed food has remained stagnant. This shows
untapped potentiality of the market after attaining a large scale industry status. Even though the
growth rate of ice-cream market did pick up early part of 2000’s still it offers a huge leverage for the
players in the market. The other interesting feature of this market is almost complete domination of
domestic players such as Amul, Kwality Walls, Mother Dairy, Vadilal and several regional ones such
as Dinshaw in the West and Arun in the South over MNC’s.

The three factors of growth, population, per capital consumption, and price are all projected to
increase over the next six years. Population is projected to grow at 1.8%, per capital consumption is
projected to grow at 5%, and prices are projected to increase at just over 1% per year. (Overall the
long-term projection for consumer prices is expected to rise at 3.5%, however, given the intense level
of competition S K Consulting does not think it likely that ice-cream prices will rise that fast.)
Overall the market will grow from $245 million to $360 million, a compound growth rate of 8%. Of
the $115 million in growth, 60% will come from increased per capita consumption, 24% from
increased population, and 16% from increase in price.
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Ice-Creams
Period Growth Rate

1990-91-1996-97 4.2%
1996-97-2001-02 6.9%
2001-02-2006-07 8.8%

2006-07-2011-12 8.3%

2011-12-2019-20 8.7%
(Source: Intecos-CIER)

The overall ice-cream market is estimated at over 250 mn litre valued at around Rs 17 bn. Nearly, a
fourth of the market by volume at 50 mn litres is in the organized sector with players like Amul,
Hindustan Unilever (HUL), Mother Dairy, Vadilal having a major share. In value terms, the organized
sector has an overall market of over Rs 10 bn.

Market Drivers

• Lucrative Nature of Business

• Rise of buyers in impulse segment
• Strengthening of distribution network
• Increase in disposable income
• Low per capita consumption of ice-cream

Trends Driving Growth in Industry

• Rising Incomes: India’s strong economic growth is increasing consumers’ incomes. It is

estimated that by 2025, India will have 583 million people living on incomes of above US$
4,380 (around US$ 23,530 after accounting for the purchasing power parity). Furthermore,
around 65 percent of the population is under the age of 35, which means there is an increasing
number of people who are capable of earning and have rising disposable incomes. Rising
incomes are also driving up demand for specialty and value-added food products.
• Urbanization: The typical Indian lifestyle is becoming more urbanized and Western. This is
leading to higher consumption of processed, packaged, and branded and value added food and
beverage products. Urban consumers are increasingly willing to pay for premium products.
However, the majorities of the population are still located in rural areas and consume only
subsistence foods such as cereals and breads.
• Diet Diversification: Indian consumers, particularly the younger population, are becoming
more accepting of different food and drink products. There is increased demand for product
variety, as well as products from different countries. The number of imported food products is
increasing in retail stores. This trend is evident not only in organized retail, but also in the
small family-owned stores which dominate the market.
• ‘Glocalization’: Glocalization has caused international food products to be adapted to suit
Indian consumers. For example, McDonald’s in India provide vegetarian rather than beef
burgers and pizza chains serve pizzas with Indian toppings such as curry. This has resulted in
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greater acceptance and increased demand for international food and beverage products in
India.
• Health Consciousness: Indian consumers are becoming more careful about their health.
Nutrition is starting to become an important consideration when purchasing food. In general,
older and female consumers tend to be the most health conscious when making purchase
decisions.

Challenges

Selling an ice-cream is different from soft drinks due to infrastructure bottlenecks. An ice-cream
requires continuous refrigeration unlike soft drinks. The country lacks proper infrastructure in respect
power, road and transportation. It does prevent companies from selling take-home packs inside and
far palaces of the country.

The second challenge this seasonal product faces is the regional domination of companies has
splintered the market and enjoyed only local popularity the net result was company’s total sales pale
insignificance before the total business. Say example Mother Dairy has only 150 crore worth of
business in the total business of Rs 3000 crore. The players have to face competition among
themselves but also other like foods.

Though trend is changing consumers still consider ice-creams as a dessert and a side item ordered for
it when parents are accompanied by children. The high rent charged by malls for the floor space is
also affecting the business and expansion plans. Rise in input costs is also eating up the profit margin.

Industry Trends

• Frozen Yoghurts
• Exclusive stores
• Entry of Eatery Players
• Promotion offers flooding the sector
• Mini meal concept
• Alternative products
• Introduction of new variants
• Indian Ice-Cream manufacturer’s Association

Indian Ice-cream Manufacturers’ Association (IICMA)

Indian Ice-Cream Manufacturers' Association (IICMA) is a professional nonprofit organization

dedicated to the education and communication of responsible and ethical practice in the Ice-Cream
industry and to promote & enhance the quality, safety in ice-cream manufacturing, networking and
guidance to ensure the future success of the Ice-Cream industry.
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Recent Development in Ice-Cream

• This time companies are coming with concept of Probiotic health and wellness ice-creams
and sugar free variants. They are coming with natural flavors like natural vanilla.
• Amul, the market leader in the ice-cream space, has already launched Probiotic health and
wellness ice-creams and is also offering sugar free variants.
• Mother Dairy, a subsidiary of the National Dairy Development Board, has decided to expand
its naturally flavored offerings along with its new packaging.
• Some company is looking at adding more natural flavors to its portfolio. The company is also
betting big on fruit juice bars to cater to the growing number of conscious consumers.
• Hindustan Unilever introduced Moo ice-cream under the health and wellness umbrella. Moo,
a combination of chocolate and vanilla, is targeted at children and mothers because of its
health credentials- each stick has calcium equivalent to one glass of milk.
• In the field of marketing and setting up new shops the multinational companies are targeting
big malls and multiplex. They are setting shops in malls and multiplex in good positions to
attract customers. They are spending a lot of money to setup these types of big shops because
they know that the buying capacity of Indian people is increased very rapidly and most of
them are ready to pay the amount for company’s premium segment of ice-cream.
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A LOOK AT OUR CLIENT

Since 2003, Ben & Jerry's have been working on a sustainable Caring Dairy initiative, which helps
level out needs of the farmers and their cows, as well as the planet's needs. The company has, so far,
reduced energy use on their 11 farms by 2%, and converted all their farms to green energy. Also, in
2002, Ben & Jerry's in the USA committed to reducing carbon dioxide emissions by 10% by 2007,
and by investing in a variety of efficiency measures, this target was achieved with ease - the USA now
produce 32% less carbon dioxide emissions (per pint of ice-cream) today (in 2008) than in 2002. This
initiative was brought to the exclusive provider of milk for Ben & Jerry's European ice-cream
production, Beemster Cheese, in 2007.

In addition to helping farmers and their cows, in 2001 Ben & Jerry's began sourcing vanilla, cocoa,
and coffee, for their smooth ice-creams, from cooperatively run farmer associations - these
community structures help promote their members' quality of life, improve worker's benefits, and
sustain a commitment to their land and communities. In 2006, the world's first ever vanilla ice-cream
made with Fair trade ingredients was launched by Ben & Jerry's. 2007 saw the release of Vanilla
Toffee Crunch, using 100% Fair trade certified cocoa, sugar, and vanilla, and in 2008, Chunky
Monkey was guaranteed to be traded in accordance with international Fair trade standards as well.

History

• Ben Cohen and Jerry Greenfield were childhood friends born in Brooklyn, New York, in
1951.
• During his senior year of high school, Ben drove an ice-cream truck.
• After graduating high school, he attended Oberlin College to study medicine. Jerry worked as
an ice-cream scooper in the school’s cafeteria.
• After moving to North Carolina for a few years, Jerry reunited with Ben in Saratoga Springs,
N.Y., and they decided to go into the food business together.
• At first the pair thought about making bagels but decided the necessary equipment was too
expensive. Instead, they settled on ice-cream.
• They took a $5 course on ice-cream making and in 1978 opened the first Ben & Jerry’s in a
converted Burlington gas station.

Timeline

1. 1977 Ben Cohen and Jerry Greenfield Learn About Ice-cream- In 1977, Ben Cohen and
Jerry Greenfield wanted to open a business together. But, ice-cream wasn't their first choice.
In fact, they wanted to make bagels. Unfortunately, making bagels would involve buying
expensive equipment that they couldn't afford. So in 1977, they took a correspondence course
in ice-cream making. The course was cheap enough, costing only $5 and the two men were
able to do very well on the exam. In fact, that got a perfect score, but that might have
something to do with the exam being open book.
2. On May 5th 1978 the First Ben & Jerry's Ice-cream Shop Opens- On May 5th, 1978 Ben
& Jerry's Ice-cream was first sold. This actually came as a surprise to the two men, who had
meant to open their shop on May 6th. Unfortunately, they had sent the wrong date to the
newspapers and were forced to open one day early. But, it was a very successful opening.
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3. On May 5th 1979 Free Scoop Day Begins- One year after the ice-cream shop had opened,
Ben & Jerry started Free Scoop Day. All day they served free ice-cream to their customers.
Another fun fact is that this tradition continues at all of their American locations.
4. In 1980 the Ice-cream Goes Into Pints- In 1980, Ben & Jerry's Ice-cream was available in
pints. This meant that the product could now be sold in stores across America. This also
meant that the company would have to move to a larger location, several times over the next
few years.
5. In 1983 Ben & Jerry's Ice-cream Is Used to Make One Big Sundae- In 1983, the world's
largest sundae was made. The sundae was made using Ben & Jerry's ice-cream and weighed
in at 27,102 pounds. Talk about a large sundae and a delicious one.
6. The Company Went Head to Head with Haagen Daz in 1984- To be perfectly honest,
Haagen Daz is like the child who takes his toys home because he's losing the game. In 1984,
Haagen Daz was beginning to lose the game, the ice-cream game that is. Stores were
beginning to sell Ben & Jerry's Ice-cream and Haagen Daz threatened to pull their ice-cream
from store shelves if the stores continued to sell Ben & Jerry's Ice-cream. At this time Haagen
Daz was owned by Pillsbury. This led Ben & Jerry to start the campaign 'What's the
Doughboy Afraid Of". All this publicity only made Ben & Jerry's Ice-cream more popular.
Their sales increased 120% that year. Another interesting fact is that the company ended up
having to sue Haagen Daz not once, but twice.
7. Cherry Garcia Hits Store Shelves in 1987- In 1987, Ben & Jerry's released Cherry Garcia.
To this day, Cherry Garcia continues to be one of their most popular flavors.
8. Received the Corporate Giving Award in 1988

Size of Operations

• Ben & Jerry's has over 580 franchised ice-cream scoop shops and Partner Shops worldwide.
• They have over 430 scoop shops in the United States.
• And over 150 scoop shops internationally.
• In 2000 Ben & Jerry’s employed 739 staff members. 422 at three manufacturing sites.
• 221 at its corporate office in Burlington. 22 people in international operations

Management Style

One of the things that make Ben & Jerry’s so different from other companies is their management
style. Just as consumers are loyal to companies whose values they share, when employees feel that
they are working for some higher purpose, as opposed to just trying to maximize the profits of the
company they work for, they become more productive. Another part of the culture is that Ben &
Jerry’s is a company where you could be yourself. They embrace diverse lifestyles and people could
dress they way they wanted. In order to keep employees happy, the Ben & Jerry’s “Joy Gang” was
started in 1991.

Key Executives
Mr. Jostein Solheim

Chief Executive Officer and Vice President of Global Brand Development

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Ms. Frances G. Rathke

Chief Financial Officer

Mr. Bruce M. Bowman

Senior Director – Operations

Mr. Yves Couette

Chief Euphoria Officer

Mr. Richard Doran

Senior Director - Human Resources

Mission

Ben & jerry’s mission consists of three interrelated parts:

• Product Mission
• Economic Mission
• Social Mission

Social Mission: To operate the Company in a way that actively recognizes the central role that
business plays in society by initiating innovative ways to improve the quality of life locally, nationally
and internationally.

Product Mission: To make, distribute and sell the finest quality all natural ice-cream and euphoric
concoctions with a continued commitment to incorporating wholesome, natural ingredients and
promoting business practices that respect the Earth and the Environment.

Economic Mission: To operate the Company on a sustainable financial basis of profitable growth,
increasing value for our stakeholders and expanding opportunities for development and career growth
for our employees.

Underlying the mission of Ben & Jerry’s is the determination to seek new and creative ways of
addressing all three parts, while holding a deep respect for individuals inside and outside the company
and for the communities of which they are a part.

They believe that all three parts must thrive equally in a manner that commands deep respect for
individuals in and outside of the company and supports the communities of which they are part of.

Activities

• Company offers 7.2% of the pre-tax profit to the charities.

• Environment protection activities (Green team).
• Supplying dairy waste to the intervolve composite program.
• Replacing traditional industry standard product packaging with Eco-pint container.
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Locations

Ben and Jerry's has locations around the world.

• Australia
• Austria
• Belgium
• Canada
• Czech Republic
• Denmark
• Finland
• France
• Germany
• Greece
• Hong Kong
• Ireland
• Israel
• Italy
• Japan
• Mexico
• Netherlands
• Norway
• Portugal
• Singapore
• Spain
• Sweden
• Switzerland
• Turkey
• United Kingdom
• United States

Recent Happenings

Ben and Jerry’s was recently bought by Unilever, a British-Dutch consumer-goods conglomerate with
$43.7 billion in annual sales in products. “Unilever repeated promises that Ben & Jerry's would
continue as an independent entity, devoting 7.5 percent of pretax profits to a charitable foundation.”
According to founder Ben Cohen who made about $ 39 million with the sale of his stock to Unilever,
The best and highest use for Ben & Jerry's is to try to influence what goes on at Unilever.

The sale to Unilever has been somewhat controversial between some Ben and Jerry’s supporters who
believe that the ethic of Ben and Jerry’s ice-cream will be lost when a multinational corporation
absorbs them. The $326 million deal would bring the maker of ice-cream flavors like Chunky
Monkey and Cherry Garcia under the same corporate umbrella as Good Humor and Breyers ice-
cream. They feel that Ben & Jerry’s has a significant opportunity outside of the United States.
Unilever is in an ideal position to bring the Ben & Jerry’s brand, values and socially conscious
message to consumers worldwide.
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Products

Premium Positioning

Instead of focusing on price Ben & Jerry’s success has been based on quality, stressing the superior
ingredients used. This demanding business model is still in practice today. They “find the purest and
finest ingredients in the world” to create a super premium brand. For example, instead of standard
flavors, they promote their dark chocolate flavor from Belgium or their vanilla beans from
Madagascar and, by doing so; they are able to charge much higher prices because customers associate
these locations to high quality. The goal of Ben & Jerry’s is not to compete in the ice-cream market
but to compete in the luxury goods sector of consumer goods. Ben & Jerry’s has been using the image
of a luxury brand made to impress, as a core competency for positioning.

In the US, Ben & Jerry’s is able to differentiate itself by portraying an aura of sophistication. Ben &
Jerry’s has successfully transformed ice-cream from the typical family-oriented market segment into a
treat of decadence and indulgence. In the US, Ben & Jerry’s promote a different type of premium ice-
cream than its closest competitor Haagen Dazs. While Ben & Jerry’s targets a nature-loving, eco-
friendly audience, Haagen Dazs caters to a more upscale, working class market.

Package Sizing and Pricing

Within the US, the ice-cream is generally sold in 14 ounce pints among retailers such as grocery
stores and convenience stores. This approach is less personal but it encourages impulsive
consumption. Ben & Jerry’s is able to sell their “small” pint at around the same price as a more
traditional 1.4 litre ice-cream tub, both at an average of $5, with Ben & Jerry’s rarely going on
promotion. With this strategy, Dreyers has been able to maintain its position as the number one US
brand in the impulse ice-cream segment since 2007, with an 18.4% market share as of 2010.
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THE BUSINESS AND MARKET ENVIRONMENT

Ice-Cream ???

Ice-cream is a frozen dessert usually made from dairy products, such as milk and cream, and often
combined with fruits or other ingredients and flavors. Most varieties contain sugar, although some are
made with other sweeteners. In some cases, artificial flavorings and colorings are used in addition to
(or in replacement of) the natural ingredients. This mixture is stirred slowly while cooling to prevent
large ice crystals from forming; the result is a smoothly textured ice-cream.

The meaning of the term ice-cream varies from one country to another. Terms like frozen custard,
frozen yogurt, sorbet, gelato and others are used to distinguish different varieties and styles. In some
countries, like the USA, the term ice-cream applies only to a specific variety, and their governments
regulate the commercial use of all these terms based on quantities of ingredients. In others, like Italy
and Argentina, one word is used for all the variants. Alternatives made from soy milk, rice milk, and
goat milk are available for those who are lactose intolerant or have an allergy to dairy protein, or in
the case of soy milk for those who want to avoid animal products.

History of Ice-Cream

Ancient civilizations have served ice for cold foods for thousands of years. The BBC reports that a
frozen mixture of milk and rice was invented in China around 200 BC, and in 618-97 AD, King Tang
of Shang had 94 men who made a frozen dish of buffalo milk, flour, and camphor. Alexander the
Great enjoyed snow and ice flavored with honey and nectar. Marco Polo returned to Italy from the Far
East with a recipe that closely resembled what is now called sherbet. The Roman Emperor Nero (37–
68) had ice brought from the mountains and combined with fruit toppings.

These were some early chilled delicacies. In 400 BC, Persians invented a special chilled pudding-like
dish, made of rose water and vermicelli which was served to royalty during summers. The ice was
mixed with saffron, fruits, and various other flavors. The treat, widely made in Iran today, is called
"faloodeh", and is made from starch (usually wheat), spun in a sieve-like machine which produces
threads or drops of the batter, which are boiled in water. The mix is then frozen, and mixed with rose
water and lemons, before serving.

Historians estimate that this recipe evolved into ice-cream sometime in the 16th century. England
seems to have discovered ice-cream at the same time, or perhaps even earlier than the Italians. Cream
Ice, as it was called, appeared regularly at the table of Charles I during the 17th century. It wasn't until
1660 that ice-cream was made available to the general public.

Global Ice-Cream Industry

In 2007, the global market of ice-creams was pegged at $61.6 billion in terms of retail value or 15
billion liters 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 liters in terms of volume. Unilever business is currently at 4.7
billion Euros ($6.04 Billion). Nestle outpaced Unilever with recent acquisition of U.S. Company
Dreyer's Grand Ice-cream Holdings Inc and became world’s largest ice-cream manufacturer with 28%
market share compared to that of 17.6% Unilever share.
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Indian Ice-cream Industry: An Overview

The ice-cream industry in India is in many ways, reflective of the overall population
distribution. The country’s population is primarily rural with approximately 65% of the population
living in villages with a population of less than 5,000; this means there are well over 150,000 villages
with a combined population in excess of 650 million. This has contributed to a highly fragmented
industry that by many estimates has over 70,000 ice-cream entities. Many of these are single family
operations where the product is made either in the home or in very small factories and sold on the
streets. The 350 million remaining people are concentrated in the cities where the industry is
reasonably concentrated in the hands of a few international and domestic firms. It is estimated that
only 30% of the entire market is “organized” and the industry meets the classic definition of a
fragmented industry, that is, one where there is an absence of market leaders with the power to shape
industry events.

The Indian ice-cream industry is currently estimated to be worth Rs. 2,000 crores, growing at a rate of
approximately 12%. RS Sodhi, Chief General Manager of Gujarat Co-operative Milk Marketing
(GCMMF), the makers of ‘Amul,’ explains, “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 liters 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%.

Organized Vs Unorganized
In rural areas, kulfi ice-creams made by small/cottage producers are popular. In small towns and
villages, there are thousands of small players who produce low quality ice-creams/kulfis in their home
backyard and cater to the local market. The organized market in India has been by hit competitive
pricing from the unorganized and lack of cold chain facilities. Despite these challenges, it can take
enough motivation from poor consumption and growing need for institutional sales channel. Dates
with Honey or Pinorgane fantasy are the latest innovations that are being offered by leading ice-cream
makers of Amul and Vadilal to beat the competition heat from the organized players. The branded ice-
cream market is worth 800 crore which is growing 15 percent annually. Havmor is also adding up to
the competition by launching designer ice-creams exclusively for weddings. Vadilala is concentrating
more candies and fancy shaped products of late. The company in fact has purchased three candy lines
for this purpose. The axiom ‘Variety is the Spice of Life’ applies to this industry very much as firms
desperately banking on novelties to break out of the clutter in a crowded market place. Amul is also
keen to provide customized flavors to the consumers by adding 1000 scooping parlors through
Gujurat Cooperative Mik Marketing Federation limited. Amul has already been a market leader in
two- liter take-away home pack

Ice-Cream Consumption

Despite a decent growth rate, the ice-cream industry faces the challenge of low per capita
consumption. The per capita consumption of ice-creams in India is just 300 ml per annum, compared
to 22 liters in the US, 18 liters in Australia, 14 liters in Sweden. Vanilla, Strawberry and Chocolate
together constitute approximately 60% of the market.

India is a way too far behind even in terms of the world average per capita ice-cream consumption of
2.3 liters per annum which means a large untapped potential business waits to be explored. Seeing this
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enormous business opportunity, the war has already begun to grab the most of this pie with national
players increasing their production and international players trying to find away to enter the Indian
markets.

To be part of this race for increasing the market share, it's almost inevitable on behalf of the ice-cream
manufacturers to optimize their production systems, packaging technologies being used, cold chain
management, compliance with quality standards and hitting the right marketing mix.

This is the condition when India is a country with hot climate with a young population. Pankaj
Chaturvedi, Executive Director of Baskin Robins, explains “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. According to Pankaj Chaturvedi, “The variation in sales for Baskin
Robins can range from 15–30% from season to off season depending on geography and brand.

Market Segmentation

The market for organized sector is restricted to large metropolitan cities and large towns. 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 15% in the south. The western and northern regions knock
off the major share of the market. It can also be seen the extent of competition divided between the
branded and non-branded varieties in the market. The non branded ones continue to have sway over
the branded.

Segment Share (%)

North 30
East 10
West 45
South 15
Metropolitan Cities 65
Non Metro Cities 45
Branded 48
Unbranded 52
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Product Flavors

Vanilla and chocolate are the most preferred flavors among the customers in India followed by
strawberry. The trend has changed from plain flavors of Vanilla and strawberry to chocolate. The
majority of players play around three major flavors of vanilla, strawberry and chocolate as it
accounted for 60% of the total consumption. But for Amul bulk of the sales come from Vanilla flavor
has even helped to retain the top slot in the market. The new trend is emerging in the form of designer
ice-cream such as chilly ice-cream or paan ice-cream among others. These are usually served at
weddings. These not only taste differently, but also generate impressive aesthetic appeal. Among
other flavors Italian Gelato from fresh fruit and other ingredients such as pure chocolate, coco dried
fruit and nuts, cookies or sweets are increasingly being served at the wedding.

Demand for these exotic ice-cream flavors is reportedly rising at 15 to 20%. These are known to be
selling at Rs 450 a kg and above. The established big brands are not known to go in for these exotic
presentations. Vadilal is, perhaps, the only established name which has introduced a range of ‘artisan’
ice-creams. It has three layered ‘Tartufo’, an Italian ice-cream dessert made of gelato; a range of fruit-
shaped and sweets shaped ice-creams, decorated with ‘varakh’ and nuts.

Havmor in Gujarat offers a special menu during the wedding season. It has a special range of ice-
creams, such as Kulfis along with sweet-shaped ice-creams, besides its four-flavored Vibgyor Kulfi. It
also offers Mango Barfi ice-cream which looks like a barfi with ‘varakh’ or silver-foil on it, dry fruit
Katri ice-cream, ice-creams with a base of malai and nuts and kesar bhog with golden foil on it. Such
ice-creams cost anywhere between Rs 20 to Rs 30 per helping according to flavor.

Table: Showing Product Variation

Type Share (%)

Vanilla 30
Chocolate 15
Strawberry 10
About 200 other flavors 45
(Source: Intecos – CIER)
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LEADING PLAYERS
Amul India Ltd.

Amul Ice-cream was launched on 10th March, 1996 in Gujarat. The portfolio consisted of impulse
products like sticks, cones, cups as well as take home packs and institutional/catering packs. Amul
ice-cream was launched on the platform of ‘Real Milk. Real Ice-cream’ given that it is a milk
company and the wholesomeness of its products gives it a competitive advantage. In 1997, Amul ice-
creams entered Mumbai followed by Chennai in 1998 and Kolkata and Delhi in 2002. Nationally it
was rolled out across the country in 1999. Not only has it grown at a phenomenal rate but has added a
vast variety of flavors to its ever growing range. Currently it offers a selection of 220 products. Amul
has always brought newness in its products and the same applies for ice-creams.

It has combated competition like Walls, Mother Dairy and achieved the No 1 position in the country.
This position was achieved in 2001 and it has continued to remain at the top. Today the market share
of Amul ice-cream is 38% share against the 9% market share of HLL, thus making it 4 times larger
than its closest competitor. Media Magazine published from Hong Kong and Singapore has ranked
Amul as the number one Indian brand in its list of top 1000 brands of Asia–Pacific for the second
consecutive year. The strength of Amul lies in 70,000 outlets spread across the nation. The company
has many more aces up its sleeve: A new range under the Swirl sub-brand, two new flavors under
‘Sundae Surprise’ in 750 ml take away packs and jumbo cups (130ml) in five different flavors.

In January 2007, Amul introduced SUGAR FREE & ProLife Probiotic Wellness Ice-cream, which
was a first in India. This range of SUGAR FREE, LOW FAT Diabetic Delight & ProLife Probiotic
Wellness Ice-cream is created for the health conscious. Amul’s entry into ice-creams is regarded as
successful due to the large market share it was able to capture within a short period of time and due to
price differential, quality of products and of course the brand name.

For any new player to enter this market, three things are critical: Decentralized manufacturing
facilities, Efficient cold chain and Growing market.

Uniliever’s Kwality

Kwallity Wall’s was launched in 1995 as Hindustan Unilever Ltd ‘s. master brand for ice-creams.
With in-depth knowledge of the Indian market and Unilever’s state-of-the-art technology, Kwallity
Wall’s has been delivering superior quality products under its international brands. Hindustan
Unilever started by merging 6 existing ice-cream brands in the country and then launched Kwallity
Wall’s range of ice-creams and frozen desserts.

• Unilever is the world's biggest ice-cream manufacturer, with an annual turnover of €5 billion.
• Heartbrand products are sold in more than 40 countries. The Heart brand operates under
different names in different markets (Wall's in the UK and most parts of Asia, Algida in Italy,
Langnese in Germany, Kibon in Brazil, and Ola in the Netherlands)

Kwality Wall’s is a major producer and distributor of ice-cream and other dessert products in India,
Pakistan, Sri Lanka, Malaysia and Singapore. It is a the arm of Unilever in India, and is an extension
of the Wall’s ice-cream brand of Great Britain. Kwality, the original Indian company, was founded in
1956, and was the first in the region to import machinery for the mass production and sale of ice-
cream on a commercial scale. In 1995, in view of the growth potential of the frozen confections
market, Kwality entered into an agreement with Lever, and has since been known by its current
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umbrella name. Products that are popular in its home market are the Cornetto cone, and to create local
variations on others, such as the Feast Jaljeera Blast.

Kwality Ice-cream is the pioneer in the Indian ice-cream manufacturing industry and became the first
company in the country to use imported technology for manufacturing ice-cream on a commercial
scale. Today, Kwality is not just a brand– it is the ice-cream associated with the Indian summer; it’s
the first choice in ice-cream for any child or adult during the scorching Indian summers. Kwality ice-
creams are trusted not only for their rich, creamy flavors, but also for their trusted quality and
nutritious food value.

It has 14% percent market share. Sapient Nitro and Unilver have created world’s first smile activated
ice-cream vending machine. This machine comes with facial recognition software that detects gender,
age, mood and even how much a person is smiling will be detected through a simile-O-Meter based
upon that it dispense a free ice-cream.

Vadilal Ice-Cream Ltd.

Vadilal is one of the major milk and dairy product suppliers in India. The Vadilal Industries Limited
specializes in ice-creams. With its diverse range of ice-creams, the brand of Vadilal has captured a
substantial share of the Indian ice-cream market. Vadilal Industries Limited started its operation with
a simple hand cranked machine. Since then it has extended its reach in different segments of ice-
creams. The central office of the Vadilal group is located in Gujrat.

The reasonable price tags and exclusive ingredients are the main factors behind the huge popularity of
the Vadilal Group of Companies. The ice-cream manufacturing units of the Vadilal Industries Limited
come with a daily production capacity of 1-lakh liters in total. The product list of Vadilal includes 200
different types of candies, cones, cups, party and family packs and bulk packs.

To meet the demand of its huge customer base, the ice-cream division of Vadilal launches one new
flavor each month. Vadilal Ice-cream is the first of its kind to initiate “flavor of the month”. The
Vadilal ice-cream range offers a wide variety of milk and dairy products to suit the tastes of its
innumerable customers. The rich cream varieties are ideal for the foodies. The low fat desserts of
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Vadilal are meant for those who are going through a restricted diet. Besides the common flavors like
strawberry, vanilla, butterscotch and chocolate, the Vadilal Ice–Creams offer many other lip-
smacking varieties. The Fresh Fruit Fantasies, Nutty Delights and Romantic Ripples are worth trying.

Vadilal ice-cream division has always been a hot favorite with the people both inside and outside the
organization. In India, the name Vadilal is synonymous with Ice-cream. They have the largest range
of Ice-creams in the country– 120 plus flavors, in a variety of more than 250 packs and forms. The
range includes cones, candies, bars, ice-lollies, small cups, big cups, family packs, and economy
packs. Something for all tastes, preferences and budgets.

The company has invested Rs 50 crore for expansion recently. It will have 100 more Happinezz
parlors this year,” .The company is expecting 30 per cent sales growth over last year. The health
orientation will be a key issue as there is more focus on low calorie, cholesterol and sugar-free ice-
creams– a segment where Amul with its pro-biotic ice-creams launched last year led the way.

Since products are highly perishable, quick transport and proper storage are of paramount importance.
Hence refrigeration equipment and deep freezes are imported from companies, which are world
leaders in their respective fields. To ensure sufficient, timely and constant ice-cream supply, they have
a Cold Chain Network comprising three manufacturing plants [totaling a production capacity of 1.25
lakh litre per day], about 23 C&FA, more than 500 Distributors and over 40,000 Retailers.

Mother Diary Ltd.

Mother Dairy– Delhi was set up in 1974 under the Operation Flood Programme. It is now a wholly
owned company of the National Dairy Development Board (NDDB). Mother Dairy markets & sells
dairy products under the Mother Dairy brand (like Liquid Milk, Dahi, Ice-creams, Cheese and Butter),
Dhara range of edible oils and the Safal range of fresh fruits & vegetables, frozen vegetables and fruit
juices at a national level through its sales and distribution networks for marketing food items. Mother
Dairy sources significant part of its requirement of liquid milk from dairy cooperatives. Similarly,
Mother Dairy sources fruits and vegetables from farmers/growers associations.

Mother Dairy markets dairy products like Liquid Milk, Ice-creams, Flavored Milk, Dahi, Lassi,
Mishti Doi, Ghee, White Butter, Table Butter, Cheese, UHT Milk. Mother Dairy milk (Bulk Vended
Milk) is fortified with vitamin A @2000 IU per litre of milk as a part of social accountability. This
program was started with the Mother Dairy, Delhi, since February 1980 and thereafter Mother Dairy
is continuing this program on their own as a social responsibility without having any financial
assistance from the Government as well as since it is felt that BVM is generally consumed by the
middle/lower middle/poor strata of the society. It is also found that the dietary practices adopted by
these classes are deficient in Vitamin A.

Dinshaw’s Ice-cream

It was started in Nagpur, more than 20 years back. They had a regular milk supply and during non
summer months they started selling milk. Dinshaw’s Milk was available at counters in number of
cities in Maharasthra. They became very successful due to their product quality and spread their
business network in other states as well posing a challenge to the Government owned milk scheme.
Dinshaw’s is a hit with those on the mall crawl, thanks to the ‘zara hat ke’ flavors of ice-creams it
offers. Belgium, Mello Yellow, Litchi, King Alfranzo, Chikoo, Guava, each is different, even if a
trifle synthetic. Still, the Anjeer Badam Ice-cream and Asli Chocolate Ice-cream, both intense and
unusual are particularly recommended.
 P a g e | 31

Top ‘N’ Town

Bhopal– the City of Lakes is gaining popularity rapidly for one of the most promising brands in ice-
cream- Top ‘N Town. Top N Town has been serving ice-cream with smiles for almost forty glorious
years now. Top N Town’s history dates back to a humble beginning by Late Shri Balchand Kukreja in
1970. The reins of the business are held by his five grandsons who further developed the business to
what it is today. This group of five brothers was a combination of hard-work; determination and unity
that made Top N Town touches the pinnacle of success. Ramani Brothers created a milestone among
the business community of Bhopal. It is perhaps the professional approach backed by dedicated young
team behind that lead to the phenomenal success of the Ramani Group. Today TOP’N TOWN has
strong presence in seven States, Chhattisgarh Maharashtra, Rajasthan Punjab, Orissa, Uttar Pradesh
and Madhya Pradesh.

Baskin-Robbins

It is a global chain of ice-cream parlors founded by Burt Baskin and Irv Robbins in 1945, from the
merging of their respective ice-cream parlors, in Glendale, California. It claims to be the world’s
largest ice-cream franchise, with more than 5,800 locations, 2,800 of which are located in the United
States. Baskin-Robbins sells ice-cream in over 30 countries, including Canada, Japan, Mexico, The
Dominican Republic, Bahrain, The United Kingdom, Russia, the United Arab Emirates, Egypt, Saudi
Arabia, Australia, the Philippines, Thailand, Indonesia, Malaysia, China, Bangladesh, South Korea,
India, Sri Lanka, Panama and Taiwan.

Cream Bell
The group company Universal Dairy Products Pvt Ltd, which has a technical tie-up with the French
dairy major Soddial and brought Cream Bell brand of ice-creams into India last year, is exploring the
possibility of entering the ultra heat treatment (UHT) milk market under the same brand name. The
Company is on track with expansion plans as far as Cream Bell ice-cream is concerned. Cream Bell is
a popular Ice-cream brand in the country as people love the different flavors and extremely rich and
creamy quality.

Havmor
It has plans to add low-fat ice-creams to its ‘health portfolio’ led by sugar-free products. The company
is planning to start 50 franchised ice-cream parlors and fast food joints in Gujarat, Maharashtra and
Rajasthan along with two new restaurants. It has been planning to set up another state-of-art ice-cream
plant at GIDC, Naroda to meet the demand.

Nirula’s
A well-known name in the hospitality industry had like all success stories a small beginning. The
Nirula’s Family came to Delhi in 1928. The Nirula brothers before going into the Hotel and Food
Service Industry tried their hand at various professions including running a pharmacy, optician shop
and a photo studio line shopping sites for leading media companies. India plaza is managed by a
professional management team. Today, the Noida production facilities include the Bakery,
Confectionery, Cheese Plant, Ice-cream Plant, Food Processing Unit and Hot Kitchen.

Arun Ice-creams
It is a popular ice-cream brand in South India. Arun has over 1000 exclusive parlors. Of the 1,000
outlets, 670 are in Tamil Nadu, 148 in Karnataka and the rest in Kerala and Andhra Pradesh. It has
over 70 flavors and combinations. Among these, many of them are India’s first & trendsetters in their
category such as the Color Magic, an ice-cream that changes colors. Hatsun has set up 3000 liters per
day ice-cream plant in Seychelles in May 2008 and was setting up another plant in Fiji in the end of
year 2009. It also has ice-cream plant in Brunei.
 P a g e | 32

THE COMPETITION
As the industry evaluation would indicate the competition is significant. The 70,000 some
participants is a large number but the more serious challenge comes from the top six national firms;
Amul, Kwality Walls, Mother Dairy, Vadilal, Dinshaw, and Arun. These top six firms dominate the
market and essentially control the organized market. Detail statistics are not available to indicate
market share but S K Consulting estimates that these six firms control 40% to 50% of the urban
market.

Historically MNC’s have not achieved much success in penetrating the Indian market. There
are a number of possible explanations for this; the relative embryonic and disorganized nature of the
market, excessive government regulation that included excessive tariffs and the restriction that
imported ice-cream could only be sold in hotels, and a highly fragmented and ineffective media.
Most of these market inefficiencies have been or are in the process of being corrected and S K
Consulting believes that conditions have ripened to the extent where MNC’s can now effectively enter
the market and compete with the domestic firms.

India is considered to be the largest milk producer across the globe and accounts for one-fifth of the
total global milk production. It constitutes of different sub segments of which ice-cream has seen
strong growth in the market. The Indian ice-cream sector is a competitive market with strong
competition from the unorganized sector. At a time when input prices are rising and branded players
are forced to increase prices of their products, unorganized or local players indulge in low quality
ingredients and offer products at cheaper prices. However, the sector is still on a growth path as
constant innovation presents products catering to the varied needs of customers. Due to the
developing distribution network leading to wider availability of products coupled with increase in
disposable income among consumers; the sector braces for further growth.

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 south.

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
behavior 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.
S K Consulting has analyzed the Indian ice-cream industry in the pattern of porter five forces model
given by Michael Porter. The five factors are:

Threat of New Entrants

In ice-cream industry firms compete with 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.
 P a g e | 33

Powers of Buyers

For ice-cream manufacturing companies, the main supply chain members are retailers, which buy in
large quantities and push 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 dessert which is prepared by using cream and Faludah is having rice
noodle with flavors 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 have started serving in Indian market. There are
domestic players also which are emerging in this sector like Saras ice-creams in Jaipur and Nirula’s
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 oligopolistic market. Ben & Jerry’s with its ice-cream product has
to compete in this oligopolistic type of market. Following are the features of oligopolistic market:

Many sellers and buyers:

In oligopolistic 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% and Unilever with 14% of the total
market. Other companies are vadilal, mother 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 fewer government regulations. The firms which are not gaining
normal profits in the market can easily go out.
 P a g e | 34

Non Price differentiation:

In oligopolistic 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.

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. Ben &
Jerry’s will always have to come up with different flavors and sizes in its ice-cream.

Current Strategies of Ben & Jerry’s

Ben & Jerry’s 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. Ben & Jerry’s’ strength lies in consistent
good quality, trust and relevance in their products. Ben & Jerry’s had never spent more than one
percent of the total received revenues on advertising and marketing. According to current strategy,
Ben & Jerry’s will soon launch campaigns based on mass media advertising. Ben & Jerry’s is also
increasing its number of ice-cream parlors from 800 to 3000 and also increase in Ben & Jerry’s ice-
cream retail outlets from 60000 to 70000. By the year of 2013, Ben & Jerry’s’ target is to open 10000
ice-cream parlors and to achieve 2.5 billion dollar figure. Ben & Jerry’s is now adopting the
aggressive strategy in their marketing and trying to make more direct relationships with the
customers.

Future Strategies

As a management consultant, I suggest that Ben & Jerry’s should follow the following growth
strategy in India. Ben & Jerry’s is not that popular, as it is in other countries and should target to
increase the reach in India by the year 2013. In India Baskin & Robbins and Gelato ice-cream gives a
very strong competition to Ben & Jerry’s. Currently, Ben & Jerry’s do not spend more on advertising
for their ice-creams, so there is an opportunity of more advertising and public relationship to get the
maximum reach and grab more market. To compete, Ben & Jerry’s also have to open more of ice-
cream parlors in India as they have in other countries. Ben & Jerry’s can introduce some Indian flavor
ice-cream. Ben & Jerry’s should introduce more of its existing sugar free range of ice-creams and
fitness candies in India to target health conscious consumers as Indian people prefer more of
nutritious level in their eating habit (cultural india,2009).

For manufacturing of all these products Ben & Jerry’s has to set up more factories in India, to reduce
transportation cost. On point of price Ben & Jerry’s always followed low pricing strategies for its ice-
creams and giving best quality. As, Ben & Jerry’s mission is to cater best quality ice-cream, it has
already build a strong image in global market. Ben & Jerry’s can go for growth by external expansion
like, vertical integration i.e., 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 Ben & Jerry’s 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,
Ben & Jerry’s ice-cream can get a foothold in India by 2014. In Indian ice-cream industry which is in
 P a g e | 35

growing stage, there will be many MNC’s and other big players, so, Ben & Jerry’s has to retain its
premium position in the market.

The Ben & Jerry’s Ice-cream SWOT Analysis

Although the Ben & Jerry’s is doing currently OK, but facing the intensive competition, the limited
UK ice market is seen more and more hard. Under this circumstance, it is necessary to consider
developing new market. This section analyses the company in terms of Indian ice-cream market by
adopting SWOT approach.

Strengths Weaknesses

• Strong brand name. • Slightly high in price due to use

of special products.
• High quality products.
• Poor operating system.
• Strong presence of parent company in
India. • Little knowledge of market in
India.
• Wide variety of unique ice-cream
flavors.

Opportunities Threats

• Positive outlook for the Indian market. • Low-end products.

• Increasing demand for organic healthy
food products.
• They can come up with new flavors.
• Focus more on advertising and
marketing strategies.
• Product innovation.
• Rising raw material prices.
• Threat of new viable competitors.
• Consumers can easily switch to
other substitutes.

Strengths

Strong brand name

The company has marketed USA’s well known brand throughout the years. This is perhaps the reason
why the consumers still willing to buy its products even there has been no innovation and high price.
This means that the brand to a certain extent represents a high quality product. This gives the
company the chance and confidence to develop new products and entry to new market.

High quality products

“Verona” rang of flavored ice-cream products are known as high quality. It is this which helps the
company holding its competitive advantages. This value will undoubtedly make easy to the company
developing its new market.
 P a g e | 36

Weaknesses
Products innovation
The company is known as a traditional value keeper, with its traditional products and traditional
ingredients. It does pay attention to suiting consumers’ life style needs. This could result in a situation
where it will lose its segment consumer group like children.

Poor operating system

The tightly control over the overheads has been a major weaknesses that prevents the company
growth. The company’s investment in research is extremely low. In 2004 and 2005, it spent only
3,000 USD on research, which holding a per cent as low as less 0.1. Meanwhile, its advertisement
costs are also seen as the lowest among its competitors. In addition, the company’s management
system is also seen as poor example.

Opportunities

Positive outlook for the Indian Ice-Cream market

There will be more foreign imports of advanced technology, and traditional machinery will be
replaced. The quality of products will improve as a result. Urban consumers will be exposed to more
foreign brands and will be tempted to be more adventurous in trying out these products.
Improvements to the distribution infrastructure will benefit sales of ice-cream products, as they
become more widely available, even in remote areas. With the further opening up of the retail
ownership system, more international brand launches are expected through foreign-owned channels.

Threats
Low-end products
Intense competition has led to the price campaign, and in turn has resulted in a situation where
manufacturers have to give up high-end products to cater for the demands. Even key foreign players
such as Wall's and Dunkin’s have to adjust their product portfolios to cater to local preferences. For
instance, they cut their product prices by more than 30% over the period to compete better with
domestic players. New product launches in 2009 were mostly mid-priced products, thus increasing
competition in this price segment. According to official statistics, about 80% of ice-cream products
cost below Rs. 20, while only 3% of sales are comprised of products costing over Rs. 40

Product innovation
Another outcome of the intensified competition is that foreign manufacturers are engaging in the
launching of new products to increase brand shares. The multinational companies have introduced
ice-cream with typical Indian flavors to compete with products from local players. New launches have
also included higher end products, as companies aim to offset falling margins due to the reductions in
the prices of existing products. The market for impulse ice-cream is still the focus because consumers
commonly buy ice-cream on an impulse basis. This means that the Ben & Jerry’s traditional values
must be changed otherwise it will not be able to tackle with the competition.

Rising raw material prices

With the price of basic food and feed commodities on the rise, food manufacturers are increasingly
facing pressure on their margins. The Ben & Jerry’s uses basic raw materials in large amounts. If a
raw material price continually rises, it would lead to increased pressure on the company’s margins.
 P a g e | 37

Future of ice-cream Market in India

Ice-cream market will expand with increase in number of malls. Few years ago consumers used to go
out for walk after dinner and used to buy ice-creams from hawkers. But now consumer who often visit
malls for entertainment prefer to buy ice-creams during different times of the day as it is visible
upfront and feel like spending Rs. 50 for that tasty chocolate swirl with cake and nuts. As marketers
are understanding the different needs of consumers, be it health conscious people, kids, youngsters,
aged people etc, and coming up with products specific for them... with portfolio of flavors, consumer
today has plethora of options at hand to choose from and therefore high probability of buying one
more scoop of ice-cream. Also with increasing wallet size and innovative modern retail formats, it has
definitely given a good chance to the ice-cream industry in India.

Regulatory Environment

When negotiating supply contracts and before beginning actual export, companies are advised to
consult closely with their importer or distributor.

Duties and tariffs

Import tariffs vary depending on the product, but in general are quite high. Overall tariffs paid on
products generally range from 26 – 74.6 percent. Furthermore, the tariff system can be complex as
there are a range of taxes which must be paid on imports. The main duties and tariffs are:

Basic Duty: This tax is applicable to most imported goods and the rate is 30 percent for most
products.

Additional Duty (AD) or Countervailing Duty (CVD): An additional duty to match the domestic
Central Value Added Tax (CENVAT) for goods produced and manufactured in India. The CVD rate
is based on a product’s Maximum Retail Price (MRP).

Special Additional Duty (SAD) or Special Countervailing Duty (SCVD): A 4 percent duty on most
imported products. This tax is designed to match domestic taxes such as Sales Tax and Value Added
Tax. Due to food inflation concerns and unpredictable weather that affects agriculture, there are
certain products that are exempted from import tariffs such as wheat, rice, corn and crude vegetable
oils. For more information on duties and tariffs, visit the website: www.cbec.gov.in.
 P a g e | 38

Industry Standards

Unprocessed food products require the following certification from the Ministry of Agriculture:

• Plant Products: Phyto-sanitary certificate

• Animal Products: Sanitary Health Certificate

Processed food products generally do not require certification, with the exception of livestock
products (which require export certificates from the country of origin) and biotechnology products
(which require approval from the Genetic Engineering Approval Committee and the Ministry of
Environment and Forests).

Food and beverage products exported to India will also need to conform to domestic laws depending
on the specific product. Standards are governed by the Food Safety Standards Authority of India
(FSSAI). The five major Indian ports all have FSSAI inspection officers to ensure that imported
goods conform to standards.

The primary reference document for requirements is the Food Safety and Standards Regulations,
2010.viii For more information, visit the website: www.fssai.gov.in.

Legal Framework

Labeling Requirements

Chapter IV of the Food Safety and Standards Regulations 2010 outlines labeling requirements of food
and beverage products. In general, the following information should be provided:

• Name or description
• Ingredients (except where the product is a single ingredient)
• Net content by weight, volume, number or drained weight (in metric units)
• Unique lot number, code number or batch number
• Date of manufacturing and / or packing and name / address of manufacturer
• Best before date and instructions for use (if applicable) and expiry date
• Maximum Retail Price (MRP)
 P a g e | 39

All of the above information must now be printed in the exporting country and cannot be added onto
the packaging in India.

For packaged food products, the following nutritional information should be provided:

• Energy value (kcal)

• Amount of protein, carbohydrates (particularly the amount of sugar) and fat.
• Numerical information on vitamins and minerals
• Amounts of other nutrient if a health claim is made

Where applicable for all food products, the following information should be provided on labels:

• Purpose and license number for irradiated food

• Declaration of additives (such as colors and flavors)
• Declaration of ‘Vegetarian’ or ‘Non-vegetarian’ (this is indicated by green and red dots on the
label)

For imported products, the following additional information is required on labels:

• Name and address of Indian importer

• Common name of the product
• Month and year it was manufactured, packaged or imported
• Country of origin

Cross Border Risks???

 P a g e | 40

STRATEGIES FOR SUCCESS

Task One: Developing a Marketing Plan

The priority for Ben & Jerry’s is to get a foothold in highly competitive Indian market either by
entering a JV with Indian distributor or operating on franchise model. The second step is to increase
the share of Trade in order to meet the demand in summers. Enlargement of retail branches will help
to gain the market share and build stronger relations with the customers. Due to the increase in the
production capacities additional transport fleet may be necessary in coming years. There is an option
to start enlarging relationships with distributors in 2014-2015. The company will have competitive
advantage by then and will be able to negotiate necessary terms successfully.

Potential Sales

Sales Revenue Forecast (in Mn $)

250

200

150

100

50

0
2013 2014 2015 2016 2017

Sales Revenue Forecast (in Mn $)

Primary Research Survey

Data- Primary data to assess the motivation and perception of consumers towards ice-cream

Tool used– in depth interview

Sample size – 5000 (from all major cities)

Consumers Questions asked:-

1. What is your favorite brand in ice-cream?

2. What makes you like that ice-cream?
3. How much importance does price play in your choice of brand of ice-cream?
4. To what extent do the advertisements and offers influence your purchase?
5. What is the only thing that an ice-cream must have according to you?
6. What will be the factors that you suggest a new ice-cream brand in your town should have?
 P a g e | 41

Analysis:-

1. For the first questions which asked about the favorite brand of ice-cream of consumers we got
3 answers as BASKIN N ROBBINS, others as AMUL, KWALITY WALLS and CREAM
AND FUDGE.
2. For the second question where we asked about the basic reason of buying that brand most of
the answers were quality, availability, packaging and the décor of the store.
3. The third question which asked about the effect of price on their buying behavior we found
out that those who prefer going to brands like BASKIN AND ROBBINS and CREAM AND
FUDGE were least bothered about the price of the product. Whereas consumers preferring
AMUL and KWALITY WALLS were a bit price conscious though but they agreed that they
do look for more quality and taste than price.
4. Our fourth question was whether the advertisements and offers influence their purchase
behavior to which we had a kind of same answer from each of them saying yes it does to a
great extent. We had the responses as ‘the advertisements are so tempting sometimes that it
forces us to go and have an ice-cream or two at that point of time’ they also said that as
summer is approaching the effect of advertisements showing tempting ice-cream is all the
more. They also agreed that they do respond to the occasional offers that their brands provide
and try to avail them.
5. Our fifth question tried to ask them of the basic need that they want to fulfill through an ice-
cream, to which they gave somewhat similar replies saying taste and quality does form the
heart of any ice-cream brand. And that without providing taste it is not possible to sell a
product like ice-cream.
6. On asking the last question to assess their unfulfilled needs which can make space for Ben &
Jerry’s to enter they all gave various responses like innovative packaging, more flavors,
availability, natural elements etc.

Seasonality of Sales

16%
14%
12%
10%
8%
6%
4%
2%
0%
take home

take home

take home

take home

take home

take home

take home

take home

take home

take home

take home

take home
impulse

impulse

impulse

impulse

impulse

impulse

impulse

impulse

impulse

impulse

impulse

impulse

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
 P a g e | 42

Consumption Process of Ice-Cream

Pre-purchase:- Brand image, Health issues, suitability

Brand image of the ice-cream - The consumer considers the kind of image the brand that he is going
to purchase depicts. It has to suit certain status symbol, quality and any other personal brand
requirements that the consumer may have. It is important that the brand maintains goodwill,
satisfactory to the consumer Health Issue to ice-creams relating- The modern consumer is highly
health conscious and is becoming aware of the rising health issues and its impacts. It is important that
the brand satisfies this need of the consumers and ensures health related gains rather than loss. About
which we will be discussing further in this report. Suitability– The product should suit the taste, flavor
and ingredients that is in line with the consumer needs and wants.

Purchase:- Price, Environment, Service

Price of ice-cream- Price should be affordable and the product should provide money’s worth in terms
of quality, quantity and consumer satisfaction. As kids also form a main segment of our section a
proper care should be given as far as pricing is concerned. Environment- The environment should be
such that the consumer wants to stay there and spent some quality and quantity time. Service- The
service should be fast so that the customer waiting time should be less and leads to their satisfaction
and results in formation of good brand image.

Post-purchase:- Quality, Satisfaction, Store experience

Quality of ice-cream– the quality of the ice-cream delivered certainly plays a vital role in determining
whether the customer will re purchase the brand or not. The quality and taste of ice-cream determines
the satisfaction level of the customer and hence plays a vital role in determining his approach towards
the product. Satisfaction from ice-cream- well satisfaction is a holistic picture the total experience of
the customer with the brand considering various factors as mentioned above and then finally arriving
at a conclusion saying whether he is satisfied or not from the product.

Task Two: Designing and Administering a Marketing Plan

To develop Indian ice-cream market has never been easy as analyzed above. However, this does not
mean there is no chance to success. Being having the good reputation in this industry, the Ben &
Jerry’s ice-cream could still win the campaign if it follows an appropriate marketing strategy. This
includes a general strategy and step by step plans. The general strategy refers to the regenerative
innovation with respect to the company’s traditional values. This calls for the new strategy on product
innovation, distribution channel, sales promotion, and new market development as well. The entry to
Indian ice-cream market, in particular, requires properly prepared plan as presented below.

Learning Indian business culture

The process of globalization has witnessed the rapid growth of international activities (Frank 1994).
Once a firm expands its operations outside the borders of its own nation-state and outside the
dominance of its own home culture, the influence of the host countries’ national cultures becomes
reality (Fatehi 1996). Conducting business across international boundaries requires interaction with
people and their organizations nurtured in different cultural environments (Kale and Barnes, 1992).
Therefore the need for knowledge and understanding of the social-cultural difference between host
country and home country becomes of paramount importance.
 P a g e | 43

For most western people, India is still a mystic country owing to its cultural features being completely
different from those of western countries (Ghauri et al, 2001). Indeed, the traditional Indian culture, in
which Confucian philosophy is dominant, is a high context culture, which is opposite to western
culture which is low context. It also has its own incredibly complex Indian condition, which always
confuses western people (Ghauri et al, 2001). All of these make western negotiators feel difficult and
confused when they negotiate with Indian negotiators. Many failed negotiations are caused by the
poor understanding of Indian culture or lacking of awareness of the Indian business negotiation style.

Business Culture

• Concept of time, the IST! If you are 15 minutes late for a business appointment, people may
scarcely notice.
• In the West, we are socialized to wait our turn. We also expect undivided attention once we
do start to be served
• What are considered occult sciences in the West are often mainstream practices in India.
Astrology, numerology, and palmistry can affect the functioning of businesses and of society.
• Breakfast meetings are rare in India, and dinner is often eaten very late in the evening.
• In the United States of America, efficiency, adhering to deadlines and a host of other similar
habits are considered normal and are expected.
• Aggressiveness can often be interpreted as a sign of disrespect.
• As Indians are used to a system of hierarchy in the work-place, senior colleagues are obeyed
and respected.
• In a group discussion, only the senior most people might speak, but that does not mean that
the others agree with him. They may maintain silence, without contradicting him (or you) out
of respect for seniority.

Choosing Appropriate Entry Strategy

To compare with its counterparts, the Ben & Jerry’s has missed an early chance to develop the Indian
market. However, it may enjoy the advantages over the follower strategy in terms of initial market
costs and questionable effectiveness. Indeed, for pioneer entrants, some factors such as demand
uncertainty, entry scale, advertising intensity, entry time of followers, and the scope of the economy
are all risk. Now for the Ben & Jerry’s, it is easier to develop effective entry strategy into the
emerging market in India. Moreover, studies have demonstrated that those innovative late entrants
grow faster than pioneers and have higher market potentials and repeat sales rates. Moreover, they can
slow the pioneer’s growth and reduce its marketing spending effectiveness.

Nonetheless, in doing so as innovative late entrants, apart from the above mentioned general
innovation strategy, the company needs to study how to build its distribution channel in short order
and to develop it market share. In so doing, an effective way is to set up joint venture through the
Unilever, find an appropriate counterpart to merge it and use its distribution channel and factories.
This strategy has been evidenced by many examples.

Situation & Road Ahead

When entering the Indian market, Ben & Jerry’s should use adaptation as a global strategy, while
simultaneously taking advantage of cultural arbitrage by repositioning their product. It has been
working very well for the company in other countries. Their revenue in china has reached $100
 P a g e | 44

million with a 21% growth rate during 2008-2010. The plan is to open 50 new shops in China in 2012,
exceeding over 350 stores in the country.

Immense Cultural Distance with India

Ben & Jerry’s want to enter the Indian market with the imperative of pursuing growth. Initially,
they’ll face societal and cultural risk because they offer a premium product to a price sensitive
population. In addition, the traditional diet of the Indian consists of fruits for dessert and few dairy
products, as many are lactose intolerant. These differences increase the cultural distance between
India and the US, where consumption of ice-cream is 19.8 pounds per capita per year.

Premium Positioning in India Also

On the other hand, for some Indian people, higher price and a respected brand name corresponds to
high quality. Häagen-Dazs has taken advantage of this by targeting the vast pool of the Indian wealthy
upper class. They adapted their global strategy to India’s hunger for premium goods, increased buying
power and lessoned stigma against displaying wealth which now indicates one’s implied worth. Thus,
Ben & Jerry’s should reposition itself as a luxury brand: Pedro Man, Vice President of Asia-Pacific
operations, said in an interview ‘’What Rolls-Royce is to cars and Cartier is to jewelry, Ben & Jerry’s
is to ice-cream.’’

Localized Products for the Indian

Ben & Jerry’s may introduce new products specific to the Indian market such as a tea flavor,
cinnamon flavor and ice-cream cakes shaped like designer western perfumes for Valentine’s Day.
This will demonstrate their supply chain agility by adding products to fit customer needs. Moon cakes
were one of the company’s biggest successes. Moon cakes are traditional gifts to friends, family and
clients. Their Moon cakes have shown a 25% annual growth in sales since they were first introduced
in 1997 and represented 28% of their 2010 revenue in USA.

Promotion using Indian Celebrity Endorsements

The company’s market penetration will be successful due to its branding strategy. Ben & Jerry’s
should create brand awareness and establish a premium brand image promoting love, fashion and
luxury through celebrity endorsement. They must leverage the fact that the Indian culture is based on
collectivism and a pressure to confirm. In addition, since the population is wary of the quality of new
products, it is reassuring if celebrities risk their reputation by representing the brand. Therefore due to
their marketing and advertising strategies, 50% of the Indian population will become aware of Ben &
Jerry’s by 2014. The company may also adapt their sensual American slogan ‘dedicated to pleasure’;
to fit the more sensitive Indian culture and come up with ‘if you love her, bring her to Ben & Jerry’s.

Ben & Jerry’s can have advertisement addressed to both youth and children. And as mass marketing is
dead we will focus them one by one through different advertisements. For the children and teenagers
we have the advertisement showing BEN and JERRY and moreover we have comic strip dedicated to
them in the leading newspaper which will make BEN and JERRY all the more popular. For the youth
will have an advertisement saying a magic treat to your five senses which will be showing a very
different way to look at ice-cream. A long with all these we will have three print ads having the
following tag lines:-

1. There is actually something more to an ice-cream.

2. The fun part of your life.
 P a g e | 45

3. A bite with natures delight

As Ben & Jerry’s is a fully new brand to be launched and hence it cannot enjoy anything such as
brand extensions therefore promotional strategies will have to be better than the existing ones. The
following will be the promotional strategies of BEN & JERRY’S:-

Comic strips:-
To publicize the brand mascots we are planning to have a comics strip dedicated to them. This
will popularize them if done in an interesting way moreover teenagers and youth are more
likely to get attached to them through the comic episodes.
Customer involvement: -
We can have maximum customer involvement in our outlets, customers of ice-cream love to
feel the joy of flavor they want to have so we will give them an opportunity to make their own
sundaes. There is a sense of accomplishment and satisfaction that one will associate with their
self made sundaes.
Campaigns:-
Ben & Jerry’s in its early stages will do a lot of campaigns we will make Ben and Jerry meet
the children and perform in malls so as to have more visibility. Moreover we can conduct
contests.

Who can say no to an ice- cream?

Health Conscious People

Some people are health conscious. They don’t want to put on extra weight by eating a high calorie
foods like ice-cream, so we will offer them the health-oriented ice-cream with low calorie integrands.
We offer our product as a health conscious ice-cream with slim trim ads. Our segment of product is
targeted to children and mothers because of its health credentials.

Diabetic Patients
There is a large number of Diabetic patients in India. There is large number of people who wants to
eat ice-cream but due to added sugar in ice-cream they avoid to eat ice-cream. So, we have decided to
give them a special type of ice-cream which is SUGERFREE ICECREAM. The ice-cream 'without
added sugar' is ideal for diabetics and safe for children and mothers.

Distribution Channels

In India, most domestic and imported food and beverage products go through several intermediaries:

• Clearing & Forwarding Agents: Clearing and forwarding agents (CFA) typically work with
exporters to aid transactions with stockists (distributors). CFA will transport goods to
stockists, invoice them and receive payments on behalf of the exporters.
• Stockists: These are distributors that typically operate in their own exclusive geographical
area. Stockists also usually have a sales force that works with wholesalers and large retailers.
• Wholesalers: Wholesalers distribute products to rural retailers who are not large enough to
purchase from stockists. Currently, retailers have a preference for buying from distributors or
wholesalers rather than directly importing products themselves.
 P a g e | 46

However, the distribution channels vary based on the type of product imported into India. Logistics in
India are extremely underdeveloped. A lack of cold storage facilities and transportation means that
some products get air-freighted in India, which is expensive. Large retail chains are trying to develop
their own logistics and distribution channels to ensure products reach the end consumer in a good
condition.

We did extensive market research and found that while Europeans enjoyed their ice-cream at home,
the Indian enjoyed the dining experience within a retail environment. Hence, the distribution strategy
should be opening fancy cafés in high-end real estate areas populated by Western luxury brands, and
then delivering service reminiscent of a five star hotel, focusing on customer intimacy. In order to
maintain higher quality and uphold their exotic Western brand image, Ben & Jerry’s should handle
every component of the supply chain internally by importing premium ingredients. They may also
employ cultural arbitrage by displaying ‘’Made in USA’’ on their packages, which gives them a
luxury status symbol of higher quality and thereby allows the company to charge a premium.

• Despite the fact that the own distribution system (ODS) implies high costs and long pay-off
period, it provides a lot of benefits and helps to prepare the ground for the further steps and
in particular for expanding relationships with distributors when the maximum production
capacity reaches 200 mln litres.
• Development of own distribution network will increase loyalty of customers, lower prices
and, ultimately, will boost sales.
• ODS allows to offer lower prices to consumers which automatically boosts sales.
• Moreover ODS contributes to gaining the market share and establishing strong brand on the
market which eliminates most weaknesses and threats of expanding the share of distributors
services in future. That will help to diversify distribution channels and reduce costs in the
long-run according to our estimations.

Retail Channels

The food and beverage retail market is primarily made up of small and independent family owned
stores, which held 65.4 percent of market share in 2009.vii However, modern retail formats such as
hypermarkets, supermarkets and convenience stores are starting to take away market share from these
smaller stores.

• Independent, Convenience & Gas Station Stores: The majority of small retailers are
independent family owned stores. It is estimated that India has eight million independent
neighbourhood stores. These stores offer fresh food and are easy to access for consumers.
With the exception of stores located in wealthy urban areas, these small retailers typically do
not sell imported products.
• Large Retailers: Hypermarkets, supermarkets and discount stores had 1.3 percent of market
share in 2009. Large retailers are growing as they are able to benefit from economies of scale
and offer lower prices.vii These retailers cater to consumers who want variety in products and
are able to store food in their homes by owning a fridge. Large retailers primarily operate in
urban areas where around 20 percent of the population shop with them.
• Food & Drink Specialists: In 2009, food and drink specialists had 32.9 percent of market
share. Food specialists typically operate in niche markets so that they do not need to compete
on price.
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Leading Retail Companies

Pantaloon Retail (India) Ltd is the flagship company of Future Group and the largest Indian retail
conglomerate. The company operates around 1000 retail stores and recorded sales of US$1.3 billion
in 2009. Pantaloon is a diverse company, operating multiple retail formats in different industries. In
the food and beverage industry, Pantaloon operates the following brands:

• Brew Bar: Provides beer (domestic and imported), snacks and set meals.
• Cafe Bollywood: Fast food retail chain that provides street food, burgers, pizzas and juices.
• Chamosa: Provides Indian counter snacks in high traffic areas.
• Big Bazaar: Hypermarket stores.
• Food Bazaar: Supermarket stores.
• Sports Bar: Sports oriented bar that provides domestic and imported alcoholic beverages.
• Food Hall: High end food supermarket that has several varieties of higher end imported food
and beverage products.

Bharti Retail operates convenience stores and hypermarkets under the brand Easyday. The company
currently operates around 12 stores and is in a joint venture with Wal- Mart.

Reliance Retail is a publicly listed company that operates a variety of retail operations. Food retail
formats operated by Reliance include supermarkets, mini-marts and neighbourhood stores. The
company had a net profit of US$3.27 billion in 2009.

Spencer’s Retail is a multi-format retail company that operates different sized stores. Spencer’s
Retail’s hyperstores sell both food and non-food items. The company operates in 66 Indian cities and
is one of the largest retailers in the country.vii

TataTrent - Tesco has entered into a deal with Trent, the retail arm of the Tata Group, to supply
products, services and expertise to its hypermarket business, under the brand Star Bazaar.

Aditya Birla Retail launched its first supermarket ‘More’ in 2007. Since its launch the group has
aggressively rolled out new stores, totalling over 640 stores across India.

Hotels, Restaurants & Institutions (HRI)

India’s hospitality sector is worth US$23 billion and investments into the sector for 2011 – 2012 are
expected to total US$11 billion. The sector is forecast to be worth US$42 billion by 2018.iii Due to
Indian consumers having a preference for fresh food products, the HRI sector is the primary market
that buys chilled or frozen foods.

• Hotels: The hotel industry is dominated by the top end of the market (5 star hotels) which
account for 65 percent of revenues. These premium hotels are primarily located in major
cities such as New Dehli and Mumbai, but are starting to expand to medium sized cities and
popular tourist destinations. Customers of this segment are mainly business people and
international tourists. Premium hotels import their food and beverage products through agents
that work with consolidators in Dubai, Amsterdam, Singapore and Australia.iii
• Fast Food Outlets: The fast food industry in India is populated by chains and franchises of
both Indian and international companies. Outlets attract consumers by adapting food to suit
Indian culture and tastes. The fast food industry buys mainly local ingredients, but they do
import certain products such as cheese, meat, fish, flavors and condiments.
 P a g e | 48

• Restaurants: Indians have a culture of eating home cooked meals or at least, eating at home,
so the restaurant sector is small. Indian consumers will prefer to order a take out meal to eat at
home rather than dining out. Restaurant meals tend to be perceived as less healthy and more
expensive than home cooked meals.

Task Three: Identifying and Evaluating Alternative Locations

Major malls covering Metro cities at the entrance or exit of the malls and upscale markets. Like places
in Delhi NCR can be Great India Place, Noida; EDM, Gaziabad; V3S Mall, East Delhi, etc.

Rates for the outlets

10 * 10 SQ.FT = RS 11,000(G.F)

20 * 20 SQ.FT = RS 40,000(G.F)

10 * 10 SQ.FT = RS 6,000 (F.F)

20 * 20 SQ.FT = RS 25,000(F.F)

20 * 20 SQ.FT = RS 60,000 (FOOD COURT)

Cost of outlet = Rs. 40,000 Cost of man-power = Rs.17,000 Other expenses = 3Rs.,000

Min. sale to have a break point = 10,000 unit/month

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Price and Profit Margin

An ice-cream mix costs about Rs 60-65per liter. Adding up to it one liter of air then per liter mixture
would approximately cost Rs 32. If one takes 150ml cup will end up making 13 cups of ice-creams
from one liter of mixture costing about Rs5 per cup. If one adds Rs 5 worth of cost of electricity, cold
storage, transports packaging and advertisement cost etc. The cost final cup turns out to be Rs10.
Considering the variety in offing the profit margin can go even up to 100 percent. For the bigger
players the distribution and advertisement ate into their profit margin and for small players it is the
volumes that matter. It is highly profitable business thanks to incorporation a considerable quantity of
air during hardening process to make soft and creamy. Moreover the cost of setting up of a small ice-
cream plant will not cost more than 10 lakhs including the cost of plant, labor, and storage freezers
and so on.

We will put 100-150ml cups, priced at 30-50 rupees for the impulse market. Also targeted at the
immediate consumption market are bars, sticks and cones. We will offer our bar or stick at a price
between 25-35 rupees, and cones at 60-80 rupees. One-liter family packs (in wax-coated paper or
plastic cartons) retail at Rs. 150-250 for vanilla and strawberry and Rs.300-500 for premium flavors
like chocolate.

India is a very price sensitive market. The market is open to exports from several countries and there
is no shortage of competitive products. A long-term pricing strategy is essential to sustained
competition in the market. The mark ups at each stage of the distribution process are around the
following rates:

• Clearing & Forwarding Agents: 2 – 2.5 percent

• Stockists: 3 – 9 percent
• Wholesalers: 5 – 30 percent

The whole distribution process usually represents 10 – 20 percent of the final retail price.iii

Franchising Profit

Ben & Jerry's Scoop Shops will primarily be engaged in the sale and distribution of Ben & Jerry's
Products and Non-Proprietary Products under the System. The franchisor may in limited markets and
opportunities offer a franchisee of Scoop Shops.

Initial Investment:
Full-Sized Scoop Shops (Approximately 750-1200 Sq.Ft)

Name of Fee Low High

Preliminary Agreement Deposit $18,500
Initial Franchise Fee(if applicable $18,500 will be credited from the Deposit) $10,000 $37,000
Plans, Development & Permits $3,500 $12,000
Leasehold Improvements & Construction $80,000 $200,000
Furniture, Fixtures, Equipment, Casework, & Smallwares $50,000 $90,000
Signage $5,000 $15,000
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Professional Fees $3,000 $6,000

POS, Internet Connectivity and Telephone $5,600 $6,300
Deposits $3,000 $8,000
Inventory $8,000 $14,000
Insurance $500 $2,500
Grand Opening Advertising $3,000
Additional Funds (3 months) $55,000
Estimated Total $222,600 $451,800

In-line Scoop Shops (Approximately 450-650 Sq.Ft)

Name of Fee Low High

Preliminary Agreement Deposit $18,500
Initial Franchise Fee (if applicable $18,500 will be credited from the Deposit) $10,000 $37,000
Plans, Development & Permits $3,500 $12,000
Leasehold Improvements & Construction $50,000 $100,000
Furniture, Fixtures, Equipment, Casework & Smallwares $45,000 $70,000
Signage $5,000 $10,000
Professional Fees $3,000 $6,000
POS, Internet Connectivity and Telephone $5,600 $6,300
Deposits $3,000 $8,000
Initial Training $1,000 $3,000
Inventory $6,000 $10,000
Insurance $500 $2,500
Grand Opening Advertising $3,000
Additional Funds (3 months) $55,000
Estimated Total $190,600 $322,800

Kiosk Scoop Shop (Approximately 100-200 Sq.Ft)

Name of Fee Low High

Preliminary Agreement Deposit $18,500
Initial Franchise Fee (if applicable $18,500 will be credited from the Deposit) $10,000 $37,000
Plans, Development & Permits $1,500 $5,000
Leasehold Improvements & Construction $5,000 $60,000
Kiosk base fee — includes front and back counters, lighting, sinks, sneeze
$40,000 $60,000
guards, & delivery
Equipment, & Smallwares $12,000 $25,000
Menu Board Systems $2,400 $4,000
Signage $800 $5,000
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Professional Fees $3,000 $6,000

POS, Internet Connectivity and Telephone $5,600 $6,300
Deposits $3,000 $8,000
Initial Training $1,000 $3,000
Inventory $6,000 $10,000
Insurance $500 $2,500
Grand Opening Advertising $3,000
Additional Funds (3 months) $55,000
Estimated Total $148,800 $289,800

Ongoing Costs

Type of Fee Amount

Royalty
Advertising Obligations
Transfer
Renewal Fee
Training for New or
Replacement Manager(s)
Refresher Training
Audit by Franchisor
Re-Inspection Fee
Interest on Overdue
Payments
Fee on Returned Checks
Insurance Procurement
Relocation Fee
Securities Offering
Costs and Attorneys' Fees
Indemnification
National Convention
Registration
Refurbishment Expense
Product and Supplier
Evaluation and Testing Fee
3% of Gross Sales
Total: Varies but total will not exceed 4% of Gross Sales;
Current Allocation: Local Advertising and Promotion: 2%,
Fund Contributions: 2%, Cooperative Contributions: None
$7,000
$15,000
The then-current fee for Scoop U Training (currently $1,800)
The then-current fee for Refresher Training (currently $0)
Cost and expenses connected with inspection and audit (including
travel, lodging, and wage expenses, and reasonable accounting and
legal costs).
Will vary under circumstances
1.5% per month, or maximum rate permitted by law
The then-current fee for returned checks (currently $0)
Cost of procuring insurance for the franchisee
$3,000
Will vary under circumstances
Will vary under circumstances
Will vary under circumstances
Will vary
In the range of $5,000-$15,000 for required changes
Cost and expenses incurred by the franchisor in connection with the
product/supplier evaluation and testing.

The above information has been compiled from the FDD of Ben & Jerry’s. 9Year 2012)
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SUMMARY & CONCLUSION

This work has analyzed the Ben & Jerry’s Ice-cream Ltd’s case to look at its entry strategy to Indian
ice-cream market. It can be concluded that the USA ice-cream market is highly dominated by three
large players i.e. Walls, Lyons and Cadbury– Schweppes. Although the Ben & Jerry’s currently runs
smoothly, it has to seek for new income point if it is fighting survival in the future. The Indian ice-
cream market as an emerging market, although it is also competitive, provides a great potential to
increase income. The company has its key strengths in developing new market, and it is right time to
think about its future. However, the weaknesses accompanied with the company could be risk in
developing new market, as well as external environment. In general, the Ben & Jerry’s may make
success in entry to Indian ice-cream market if follows a proper marketing strategy.

Following are the concluding points taken into consideration after the conduct of the Primary
Research:

• Advertisement acts as a very important role here. So if heavy advertisements are carried out it
will definitely increase purchase.
• Due to the changing in climate, life style and preferences, it is not necessary that they will
consume same product every time.
• The Ice-cream Industry has to further focus on:
- Strengthen communications
- Multi v/s sole dealer
- Training to dealers

In the end, by above discussed report it can be analyzed that Ben & Jerry’s is in a oligopoly market
and by the proposed strategy Ben & Jerry’s ice-cream can enter India by the year end 2013.

The ice-creams consumption levels have been pretty low in India given the strength of population and
a favorable weather conditions. The customer is needed to be wooed with a wide variety of mouth
watering flavors and design at a reasonable price so that demand will jack up. Since unorganized
market enjoys a significant market share that may delay aggressive, product innovation and
advertisement campaign which will in turn help reduction in per unit cost from the organized sector
.All in all a highly lucrative business with minimal capital is required to start with. Vanilla still seems
to be the most preferred flavor among the consumers. The western and northern regions account for a
larger sales of ice-creams in India.

There is a crying need for developing business strategies by understanding the quantitative trends
within the ice-cream market in India. Design effective marketing and sales strategies by identifying
key market categories and segments. Identify key players within the market to plan lucrative M&A,
partnerships and agreements. To call a product "ice-cream," two basic requirements must be met: The
treat must be at least 10-percent milk fat and use sugar as the sweetener. Though there is a potential
market for fat-free and sugar-free ice-creams, the country's food laws don't permit them yet.

High tariffs and inefficient distribution systems will continue to bottleneck the market for the short
term, but an increasingly affluent younger generation wants to try new tastes. Manufacturers should
keep an eye out for market changes and opportunities. Low-fat and low-sugar alternatives are also
being increasingly offered. Ice-cream parlors- not too successful so far, are increasingly being relied
on to woo consumers.

However, a concerted effort to give the consumer reason to consume more ice-cream is missing.
Individual companies do advertise in summers, especially during high-visibility sports events, but the
 P a g e | 53

initiatives lack imagination. No company, for instance, has tied up with coffee chains or liquor
companies to offer ice-cream-based cold coffees or cocktails, respectively. Sodhi of GCMMF feels
such tie-ups would also cater to only a minuscule population. Instead, he advocates lowering of
prices, cut in taxes and reduction in margins to attract consumers.

How a ‘summer’ product such as ice-cream has become a craze in cold countries such as Austria and
not in India remains a mystery that even Indian companies are unable to fathom. Even while
comparing like to like, how Pakistan, which is probably hotter and has worse infrastructure, can have
three times India’s per capita ice-cream consumption is another riddle that companies here admit to
not having an answer to. Unless industry players can generate a burning desire for the product among
consumers, ice-cream looks set to remain in deep freeze.
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REFERENCES

• Arbuckle, W.S.1981. The little Ice-Cream Book. In W.S. Arbuckle (Ed.), Columbia, MO.141
• Bhattacharya Sindhu “The Ice-cream Punch” The Hindu Business Line 24 June 2004
• Davis, C. G.; Blayney, D. P.; Yen, S. T.; Cooper, J.. An analysis of at-home demand for ice-
cream in the united States, Journal of Dairy Science, Dec2009, Vol. 92 Issue 12, p6210-6216,
• De Boer, K. Pandey, A. 1997 India's sleeping giant: Food MCKINSEY Quarterly, Great
Britian, NUMBER 1, pages 82-97
• Funderburg, A.C.1995 Chocolate, Strawberry and Vanilla: A Hisotry of American Ice-cream,
Bowling Green State University Popular Press, Bowling Green, OH.211pp
• Kumar Vinay “HLL Tastes the Cream Finally” The Hindu Business Line, 21stAugust 2002.
• Turnbow, G.D., P.H. Tracy, and L.A. Raffetto.1947 The Ice-cream Industry, 2nd ed, Jhon
Wiely and Sons, Inc. New York
• Unnithan Chitra, Ice-cream brands offer hot picks, Business Standard, June142010
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BIBLIOGRAPHY

Print Sources:
• Benkouider, C. (2004). Indulgent ice-cream overrides health concerns. Euromonitor
International.
• Kanter, M. and Corn, R. I. (1994) Do Cultural Differences Make a Business Differences?
Contextual Factors Affecting Cross-Cultural Relationship Success. Journal of Management
Development, 13.

Digital Sources:
• www.moneycontrol.com
• www.reportbuyer.com
• www.indiatodaygroup.com
• www.moneycontrol.com
• www.indiainbusiness.nic.in
• www.google.co.in
• www.indiastat.com
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APPENDIX A: INVOICE