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Building the Ice Cream Business in India-- Unilever
By:Ajay SinghBhargab DharDebajyoti GhoshDebnath GangulyKushal GayakwadJoydip PatiManisha BajajMonika RahejaPallab GhoshRajarshi Mitra
History
• HLL launched its international Walls range of ice creams in
India in the mid 1990s.
• HLL adopted a strategy of acquisitions of ice cream brands
and strategic tie ups with Indian groups to evolve its ice cream
business.
• The case deals with various marketing initiatives introduced
by HLL to create interest in the segment and expand the market.
Case HISTORY
Marketing Strategy of HLL
STRATEGIC ALLIANCES
• Early 1990-Unilever entered food business through BBLIL.
• BBLIL acquired – kissan (UB Group) & Dollops(Cadbury)
• Mid 1990– Alliance Kwality Ice cream Group.
• 1995- Acquired marketing and distribution rights of Milkfood 100%.
• 1996- BBLIL merged with HLL.
All smaller brands were phased out and Kwality Walls emerged as
a Mother Brand.
Product portfolioProduct Price (INR) Target Segment
Feast Range 15 Young generation with an attitude!
Cornetto Range 20-30 Young adults
Max Range 0.25-5 Solely children
Sundae Range 90+ Family, take-home, 10pm frozen desserts
Consumer Analysis
• Consumption of ice cream per head was very low.
• Psychological factors.
• Ice cream eating at home was confined to special
occasions.
• Indian palette restricted to three flavors - Vanilla,
Chocolate and Butterscotch.
Competitive Advantage
Seeking Competitive Advantage
Two types of analysis
• Industry Analysis – Porter’s Five Forces Model
• Comparative Analysis -- Structural and
Responsive Advantage
Porter’s 5 Force Analysis
Within the Industry:
Competition is very intense due to low differentiation. Ice cream
industry accounts to around 2000 cr & organized segment is 1000-1100
cr.
• Amul
• Mother Dairy
• Baskin & Robbins
• Local competitors
Porter’s 5 Force analysis
Threat of new Entrants:
• High in the industry
• Liberalization and globalization policies made
it easier for foreign player to enter the Indian
market e.g.. Haagen Dazs and Baskin Robbins
Porter’s 5 Force analysis
Threat of Substitute:
• Threat of substitute is very high for ice creams in Indian market
due to its culture of traditional sweets and desserts.
Some of the substitutes are :
• Traditional sweets
• Home made desserts like Halwa and Kheer
• Kulfi or Faludas
Porter’s 5 Force analysis
Bargaining Power of Buyer:
Pretty high
• Availability of existing substitute products
• Buyer Price sensitivity
Porter’s 5 Force analysis
Bargaining power of Suppliers:
Bargaining power of suppliers is pretty low as
manufacturer can easily switch to a different
supplier at low cost
Competitor Advantage
Comparative AnalysisSpecific advantage of competitors within a
given market.Two types:• Structural advantage• Responsive advantage
Comparative Analysis• Structural Advantage–
Hll being a parent company is a huge advantage to kwality
walls
Manufacturing units are located across major cities in India
• Responsive Advantage—
Strong adaptability to the changing tastes of the
consumers (introduction of Foreign Flavors)
Unique value
Opportunity & Threat Analysis
Opportunities
• In the early 2000s, the consumption of ice creams per
head in India was very low at 250 ml
• In 1997 Gov liberalized the rules for the ice cream
industry which resulted in a 15-20 % growth per annum
• Huge number of young population which is prevalent in
India
Opportunity & Threat Analysis
Threats
• Powerful local players in the market (Top n Town very
popular in MP & UP, Cream Bell, Metro).
• Entry of the foreign brands like BR, McDonalds.
• Indian Sweets Market.
• Substitute products has a strong hold in the consumer
psyche of tier 2 and tier 3 cities.
4 Phase Strategy by HLL
• Product innovation (Take home segment and
softy cones)
• Communication
• Activation & Visibility
• Distribution
Softy Cones• HLL announced the launch of Softy kiosks for selling softy ice
creams in 2000
• The product was priced at Rs.5 per cone
• HLL pursued a different business model. The company
provided the Equipment, Training, Advertising and Quality
standards while the franchisee provided the Place and
Manpower
• Hygienic (No human contact)
Strategic Changes in Softy Biz
• Problem: Higher investments 3 lakhs for machine and a
high priced mix.
• HLL reacted by introducing a softy machine worth Rs.I.5
lakh and products at various price points.
• Like a plain softy sold at Rs.7, a softy with a sauce
topping sold for Rs.12 and an addition of nuts made the
price Rs.17
C Communication-Promotional Strategies
• Kwality walls used some excellent promotional
strategies to create its brand in the Indian market
• They promoted Kwality walls as an umbrella brand and
developed different brands under it like Cornetto and
Max
• Had different advertisement and promotion campaigns
to cater to its target market
Promotional Campaigns
• May 2001 - What's on your stick?
• Valentine's Day (2001)-Cornetto Khao, Jodi Banao
• March 2002 to May 2002- Ek Din Ka Raja
• 2002- Fridge mein Kwality Walls hai kya
• 2003- Max The lion king, Bano Toonstar with Scooby Doo.
• 2003( Festive Season) Max Rocket and Max Chakri for kids and
Cornetto range and Pista Kulfi for Adults.
•
Results-Resource Based View
• With superb promotional strategies they were able to create a
differentiated product image
• EKDR sales touched 1million customers.
• They were able to create an intangible resource for sustainable
Competitive Advantage i.e. Brand name.
• As tangible resources they had a great distribution network and
positive cash flows
Superior Distribution
• Home delivery systems in Delhi, Chennai, Mumbai and
Hyderabad
• Strategic tie ups with Pizza Corners
• Exclusive parlors & DFO’s (now Swirls)
• Colorful ‘Trikes’ with Voltas cooling solutions helped HLL
to reach 900 towns by 2001 end and a quarter of sales
came from them
Competitive Strategy
Kwality walls and their main competitor i.e.
Amul believes more on a Red Ocean thinking
viz. head on competition with each other and
attacking on every price points.
Conclusion• Was able to create a brand through some excellent
Promotional Strategies.
• Concentrated on quality of their products to retain
their brand value.
• Were able to create a sustainable cost advantage with
low cost freezing units and softy kiosks.
• Were able to connect with Indian consumer psyche
and gain their affection.
Recommendations
• They have to tap the Tier 2 and Tier 3 cities, which has great
potential.
• Can create a new relatively low priced umbrella brand to tap the
rural market.
• Promotional campaigns to fight against their Substitutes like
Sweets and chocolates.
• Can have more Indian flavors in 15- 20 Rs segment.
• Introduce “Falooda” Cups.