Soft Drink Industry Executive Summary The word ‘Saturation’ does not exist in the dictionary of the U.A.E. Year by year, new products and their competing items have entered into the field and have successfully created a slot for themselves. This phenomenon is greatly supported by the open down policy of the local government to the people coming from other lands for settlement and tourism. Ice creams are a product that has not seen their prime in the U.A.E. It’s potential is tapped in a meager form. Not that the commodity is in short supply.
There is ample ice-cream available even at the moment. But, there is great scope of habitualizing the inhabitants of this place to consume more of the product, by exploiting the U.A.E. climate to its best potential. This statement vindicates the statistics that while an average person in Australia consumes 36.87 pints of ice cream, and in the United States 30.04 pints, the consumption in U.A.E. is only 6 pints per capita.
Thus, even if the consumption is increased by 6 times for a person here, we will still be comparable to Australia and will need more effort to become world leader in consumption. This indicates the amount of vacuum existing in the U.A.E for the growth in the Ice-cream consumption. The bottom line is a ‘Difference’. Up until now the ice creams that are being sold in the U.A.E. are mostly the conventional stuff and it will bring a sea change in the minds of consumers about ice creams if they are given something different at affordable prices and at accessible locations.
One such company that can meet all these interests is Ben & Jerry’s. We are a group of investors now planning to open Ben & Jerry’s ice cream parlor. The food and beverage industry has been in a boom. Therefore we plan to make our mark in the industry as the premium ice cream and yoghurt parlor in the country. U.A.E has a multi-cultural environment thus providing a good market for Ben’s. Ben&Jerry’s is the ‘difference’ which can fit in the slot to help bring up the per capita consumption of the country. Most of their ice creams are made from fresh fruits, which hardly any other maker has attempted. Introduction & Background The company Ben & Jerry’s had its humble beginning more than 70 years ago, when its founders started manufacturing ice cream with a hand – cranked machine.
Today, it offers the widest range of ice creams and frozen deserts in packs, including cups, bulks, and cones. The brand enjoys its reputation for successful innovation and development of flavors and its new offerings are eagerly awaited every summer. Current Market Situation The Marketing Environment- The United Arab Emirates has an ice cream market of Dh140 million, yet it has one of the lowest consumption (6.00 per capita/ pints) of ice-cream when compared to Australia which consumes 36.87 per capita / pints and USA 30.04 pints. The ice-cream parlors Baskin Robbins enjoys having a monopoly followed by Haagen-Dazsas and Breslers. There are other non-famous parlors in some shopping centers and malls.
Considering that there is two major franchises in the U.A.E market there is a high scope in entering the ice-cream industry. As for the external environment, it is divided in the following manner. Competitive Environment- There is high degree of competition in the foodstuff industry. In the ice-cream industry, the market share is evenly distributed with Nestle being the market leader, followed by Walls and then by Kwality. Recenlty Hag n’ Das has also come up with major marketing schemes and are aggressively marketing their ice creams.
They have a parlor opened at Al Diyafah Street in Deira. There is no official study to the exact market share. The prices in the parlors are about 10% higher to that of franchises in London and Canada. The other competitors in the family line are Igloo, Unikai, Kimo Cadbury, Mamma- Mia, and also those previously mentioned. Hags n’ Das, Cadbury’s, Baskin Robbins and have an importation, the rest are local manufacturers.
Below mentioned is the approximate market share. Estimates provided by Kwality and Unikai year 1996 Overall market growth 20% on yearly basis Social and Cultural environment- We intend to target our products to the affluent society of Asian sub continent where they prefer fresh fruits, the attempt which is being made to introduce ice-cream made of fresh fruits are likely to catch up in no time even if they are slightly higher priced as compared to conventional ice-cream. Since conventional ice creams like that of Vanilla, Chocolate, Strawberry will also be produced, we have not neglected that segment too. From the research conducted it was evident that most of the ice cream consumers want a change from the normal ice creams available and have also shown much excitement towards the opening of Ben & Jerry’s in Dubai. Taking into consideration the hot and the humid climatic conditions, people show acceptance towards cold foodstuff – whether cold drinks or the ice creams. Ice creams are not consumed on daily basis, but families do buy and consume it in bulk(family packs of Bulk ice-cream 1litre, to 5litre containers).
The average income per family is about Dh. 5,000/- in which the consumers can afford to consume the ice creams in parlors. Legal and Political-Rules and Regulations- 1. Trade license for importing foodstuff. 2.
Import & export license. 3. Health certificate of the food we are importing. 4. Original Invoice.
A very important step should be done before anything. Which is to get a sample in advance from the food we intend to import and send it to the lab at the health department which is located at the port, the results of the experiments are given within an hour. The other way to do it is by importing the goods and at the port we check them in the lab. The food will be shipped in a cold container. After certifying the documents the goods are released from the port then and before storing the municipality should approve it, after that there will be an inspection every now and then from the ministry of health. They inspect the packaging, the delivery method, and the expiry date. Our approach to Chamber of Commerce was not very productive as we understood that not only do most of the countries around the world not have any Franchising law but Chambers of Commerce also does not involve themselves in this exercise. The simplest system to know about the various Franchises available could be to approach the trade or diplomatic missions of various countries who have substantial data on established branches in various categories.
Economic Conditions-Compared to other GCC, countries, it has political stability, very low inflation, the stability of the currency against the world’s major currencies and affective bank industries. The Dirham is pegged to the dollar and it is exchanged at 3.665 for a dollar. The government is giving new opportunities to make the economy less dependent on the oil revenues. The per capita living is at $23,500 same to that of NewYork, which shows that there is a high consumption on the disposable income. Technological environment- 1) Cold storage containers: the importation of ice creams requires the use of Cold storage containers, which can be easily leased from the companies. 2) The cold storage warehouse: which will be located at the Jebel Ali Free Zone 3) Chillers: will be used at the super markets to store Ben & Jerry’s ice cream products.
4) Marketing Information System: Most of the ice cream parlors in Dubai use a computerized system to record the sales, however they do not have any system which record customer data, customer liking, and their addresses. We will use such a system that will enable us to provide them home delivery without the hassle of asking their addresses again and again. This will provide customer satisfaction and their reactions which will enable us to respond to their needs better and form a base for the primary data for future research. . Opportunities Ben & Jerry’s is well established Brand in Europe and thus has an existing potential clientele with the European expat population.
Ben & Jerry’s has a huge market in terms of U.A.E. as it has a very high per capita consumption of ice creams. Ben & Jerry’s has also the option to export to the other G.C.C. countries and other Middle East countries. Threats Ben & Jerry’s has to set up a project of international standards will have to invest in moneys which to date have not done so, and might find it difficult to sustain the profitability for the 1st few years. The other players already have a head start over Ben & Jerry’s over the past 2 decades, and are very well established in the market.
To generate consumer awareness, product trials and store traffic, Vadilal will have to spend big amount of moneys in terms of advertising and promotions, which will be in excess of what the other multinational brands are spending. The embargo on certain flavors due to specific ingredients that are prohibited in the U.A.E. Ingredients such as gelatine or those specially derived from pig fat. Segmentation Market segmentation process: 1. Identify dimensions: The dimension is already identified. We want to go in for ice cream business.
2. Develop relevant market segment profile: Ice cream is an item, which appeals to all the sectors of society. We can cater to the following segments: Families Kids (1-12 yrs) Teenagers (13-20) Young adults (20-35) Adults (35 & above) 3. Forecast total market potential for each segment: a) Analyze competitive forces within each segment: Strong competition exists for families, kids, teenagers, and young adult categories from Baskin Robins, TCBY, and Bresler’s and Haagen-Dazs. These are our main competitors.
b) Determine marketing mix to serve each segment: We have the capabilities and.