Industry analysis

In ice cream industry, consumer will be influences by many factors in choosing ice cream
brand .Ice-cream is a frozen dessert usually made from dairy products, such as milk and
cream, and often combined with fruits or other ingredients an d flavours. Most varieties
contain sugar, although some are made with other sweeteners .In some cases, artificial
flavourings and colouring 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. (Inc, 2016)

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. (Inc, 2016)

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 in tolerant or
have an allergy to dairy protein, or in the case of soy milk for those who want to avoid animal
products. New product development and innovation plays an important role as a growth
driver for industry. Maintaining price and quality, brand loyalty, and consumer group
retention are the biggest challenges for industry due to the large number of competitors in the
market. (Inc, 2016)

According to Euromonitor International 2009/2010, sales of icecream increase in Malaysia

due to disposable income increase. The volumn of the sales of the icecream are
34,492.28(000’) in 2005 and increased to 45,203.23(000’) in 2010. The value of the sales of
the icecream from RM455.32 million increase to RM548.6 million. So the icecream sales
grew by 3% from year 2005 to 2010. (icecreamreport, 2011) Malaysia registered a total gross
domestic product (GDP) of US$316.2 billion in 2013. Real GDP growth is estimated at 5.4%
for 2014, higher than the previous year. According to Euromonitor, Malaysia is the 43rd-most
populous country in the world with an estimated 29.7 million people in 2013. The population
is expected to reach 31.3 million by 2017, and then 32.4 million by 2020. Favorable
demographic factors, rising consumer disposable income, and consumer’s awareness toward
frozen dessert mainly drive the demand. (Icecreameconomic, n.d.)

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 icecreamreport, S. (2011, April 25). Seow MIee. Retrieved December 10, 2016, from
http://www.slideshare.net/smseow/an-analysis-on-the-ice-cream-brand-preferences-among-
parents-in-malaysia

icecreameconomic. Retrieved December 10, 2016, from

http://www5.agr.gc.ca/resources/prod/Internet-Internet/MISB-DGSIM/ATS-SEA/PDF/6510-
eng.pdf

Inc, S. (2016). Industry analysis on ice cream industry. Retrieved December 10, 2016, from
https://www.scribd.com/doc/26611817/Industry-Analysis-on-Ice-Cream-Industry

PEST Analysis

Political Environment

Political are basically to what degrees the government intervenes in the economy.
(obligatoire, 2013) It is a new trend that many Malaysians shift towards a healthier diet.
Icecream are considered less healthy, for example those with a high sugar, artificial colour
remain popular among Malaysian consumers leading to obesity, cardiovascular difficulties
and high cholesterol. The Ministry of Health findings estimated that Malaysian adults
consume the equivalent of 10 teaspoons of added and hidden sugar more than the amount
recommended by the World Health Organization. The Malaysian government has run several
healthy eating campaigns to amplify this trend. One important aspect is the education of the
Malaysian people regarding the impact of diet on areas such as bone and heart health.
Increasing consumer awareness in nutrition value and food fortification for healthcare has
created the demand for healthy minimally processed fresh food, organic food and natural
food flavors from plants and seafood.

Economic Environment

Economic aspects are all the macroeconomics factors that can impact on the way businesses
operate in the industry. (obligatoire, 2013) The unemployment rate, equals to 3.5% today in
Malaysia has considerably increased from 3.3 %. The consumer price of ice cream and
sorbets has increased by 2.1% in 2012. (tradingeconomic, n.d.) The inflation is also a factor
to take into account because it strongly impacts on the final consumer prices and also, the
level of sales of ice creams and sorbets. In this recessionary period, consumers are more and

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 more cautious with their money and tend to buy less ice creams. To put it in a nutshell, the
increasing unemployment rate as well as the inflation strongly impacts on the purchasing
power of consumers who prefer to give priority to necessary products than secondary
products like ice creams. That is why on average, the Malaysia people purchases frequency
for sorbets or ice creams tends to decrease, it went from 8 times in 2009 to 7.6 times in 2012.
(tradingeconomic, n.d.) The recession also impacts negatively on the recreational spending as
people save their money and spend less for leisure. In addiction, some actions from the
Government also fluctuated the economy, for example, the Government has taken steps to
increase revenue by introducing a Goods and Services Tax (GST) in 2015, which charge 6%
on every goods purchased. So this is a bad news for ice cream producers which sell their
products into restaurants, food truck or directly into their own shops.

Social Environment

Businesses that operate within the ice cream industry must comply with the social factors.
The food consumption habits of the Malaysia people businesses that operate within the ice
cream industry must comply with the social factors. Here, we will focus on the main
important factors: the food consumption habits of the Malaysia people. (obligatoire, 2013)

For Malaysia people, eating is a daily pleasure and a shared moment that obeys some rules
which is conviviality, food diversity and meal structuring. Malaysia has been rated as the
highest among Asian countries for obesity. 49% of women and 44% of men in this country
were found to be obese. Malaysia was rated heavyweight at 45.3% of its population. For
Malaysian, the taste is still the criteria the most important for food purchases and quality of
products is still essential. They are also many concerned with nutrition and they will prefer to
buy products lower – in salt, in saturated sugar and in fats and also, without food additive.
Their expectations must become the driver of production for all the companies operating in
the Malaysia market. (obligatoire, 2013)

Technology innovations

Technology innovation that enable to provide people with the quality icecream and the
information of our ice cream. (obligatoire, 2013) The ice cream industry is impacted by the
innovation of powerful kitchen appliances such as the icecream maker and the soft serve
machine. Establishing a social media presence has helped food truck businesses tell their
customers where they plan on being for each meal and when. Whether you sell your ice
cream on the go with a cart or truck or have a brick and mortar ice cream store, social media

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 works for you as well. Promote your new flavors with Google Plus, Twitter and Facebook.
Encourage your followers to post what they think of the new flavors. Followers can also post
their orders for ice cream to be picked up later. Photograph your ice cream, the ingredients,
your store and the ice cream being made. Post the photos on Pinterest, Instagram and
YouTube. Link to the photos when you promote discounts and coupons to your social media
friends and groups. (Hill, n.d.)

obligatoire. (2013, November 5). The PESTEL analysis. Retrieved December 10, 2016, from
https://weloveicecreams.wordpress.com/2013/11/05/the-pestle-analysis/

Hill, B. Good ways to advertise ice cream Promos. Retrieved December 10, 2016, from
http://yourbusiness.azcentral.com/good-ways-advertise-ice-cream-promos-20879.html

tradingeconomic. Retrieved December 10, 2016, from

http://www.tradingeconomics.com/malaysia/unemployment-rate

Analysis of competitor

Competitor A - Llao llao yogurt

llaollao was founded in 2009, it already had more than 100 shops and was the market leader
for the sector it had created itself, the frozen yogurt sector. (llaollao, 2013) As it’s natural, it’s
one of the healthiest and most recommended products in the world. It is made from skimmed
milk at the moment of serving and combined with the finest toppings. The market share of
llao llao grew 23% in 2008-2013. (llaollao, 2013) The strengthen of llao llao icecream are
because their innovative concept, natural and healthy. Wide range of toppings, fruits and
sauces to choose, affordable product and the business model is highly versatile and universal,
Their weakness is minimal of traditional advertising. (llaollao, 2013)

Competitor B – milk cow organic softserve

Korea Milkcow premium, organic soft serve ice-cream is here in Malaysia. It is the dessert
market that has been as a new cultural content in Korea. Milkcow pursues the true value in
the dessert industry and the customer’s happiness at the same time. Milkcow provide organic
icecream with the fresh milk and generously topped with sweets such as their signature
honeycomb, macarons, Oreo ,candy, etc. Apart from soft serve ice-cream, organic coffee,
candies, milkroll and homemade chocolate are also the sweet treats Milkcow specializes in.

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 (milkcow, 2014) The milk cow strengthen is they use 100% premium organic milk. Their
weakness is their cost are more expensive than others.

Competitor C – haagen daz

Häagen-Dazs ice cream comes in several traditional flavors as well as several esoteric flavors
that are specific to the brand, such as Vanilla Swiss Almond and Bananas Foster. It is
marketed as a "super-premium" brand. (“Häagen-Dazs,” 2016) Haagen-dazs sell in many
place such as supermarket, groceries, it also have many outlet in worldwide. Creative ice
cream creations made in Häagen-Dazs shops found around the world. The strengthen of
Haagen Dazs are high quality product, with no artificial and genetically modified (GMO)
ingredient, buyer trust and appreciate natural ingredient. They have strong brand recognition
all around the world with a high quality image, next, it provide a lot of flavor innovations to
answer to people who need to always discover and it have own shops. (obligatoire, 2013) The
weakness of the haagen daz is high prices of the product, because of that the group of target
customer is narrow and specific. Next is it high calories product and high butterfat content.
(“Häagen-Dazs,” 2016)

Competitive Matrix Analysis

Competitive factors Oishii sorvete Llao llao yogurt Milk cow organic softserve
Haagen daz

Product price 1 2 3 4

Product quality 2 4 3 1

Health benefit 2 3 1 4

advertising 2 4 1 3

Customer engagement4 1 3 2

Accessibility 3 2 4 1

llaollao. (2013, July 19). Franchise. Retrieved December 10, 2016, from
http://www.llaollaoweb.com/sg/franchise

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 llaollao. (2013, July 17). What it is. Retrieved December 10, 2016, from
http://www.llaollaoweb.com/sg/what-it-0

milkcow. (2014, December 13). Pavilion KL. Retrieved December 10, 2016, from
http://www.malaysianflavours.com/2014/12/honey-comb-organic-soft-ice-cream-milkcow-
gardens-mid-valley.html

Häagen-Dazs (2016). . In Wikipedia. Retrieved from https://en.wikipedia.org/wiki/H

%C3%A4agen-Dazs

obligatoire. (2013, November 13). SWOT analysis. Retrieved December 10, 2016, from
https://weloveicecreams.wordpress.com/2013/11/13/swot-analysis/

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