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NATURAL ICE-CREAM Submitted

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Aishwary kumar yadav 2013IPM009

Pallavi Gupta 2016PGP256

Utsav Mahto 2016PGP4112

Vaishali Gautam 2013IPM105

Vanam Siri Lahari 2013IPM129 Vinayagavel.S 2016PGP428

Introduction

Market:

The growth of Ice Cream Industry in India has given push to the developing market for its global

and local players which are moving into the Industry. The methods of conveyance utilized as a

part of the Ice Cream Industry are to a great extent retail channels which incorporate Mom and

Pop stores, departmental stores and distributing channels that fuses road sellers. Throughout

the years, the retail channels have commanded the distribution part of Ice Cream showcase in

India. The growth drivers for this industries in recent past are entries of international brands,

improved storages, change in consumers tastes and preferences and increased disposable

income. Ice Cream market in India during 2016-21 is expected to grow at a CAGR of 17.03%

according to the report from TechSci. As far as local utilization, Delhi is the biggest customer

for Ice Cream crosswise over India, which is trailed by Gujarat as the second biggest purchaser.

This is credited to the predominance of a one of a kind culture in Gujarat for Ice Cream

utilization. As of now Ice cream market in India is evaluated to be over INR 4,000 crores and is

developing at a rate of 15-20% year-on-year. It is anticipated that by 2019, the market will

stretch around INR 6,198 crores.

Natural Ice-Cream:

Natural Ice Cream is an Ice Cream brand claimed by Mangalore-based Kamaths Ourtimes Ice

Creams Pvt. Ltd. It was established by Raghunandan S Kamath who opened its initial store at

Juhu, Vile Parle (Mumbai) in 1984. The organization produces under Kamaths Ourtimes and

retail operations under its subsidiary organization Kamaths Natural Retail Pvt. Ltd. Kamaths

Ourtimes. The chain as of now has 125 stores crosswise over India, with 5 stores under direct

control and the rest as diversified areas. Natural have launched over 125 flavors till now from

which it offers 20 flavors throughout the year and flavors like litchi, watermelon, etc. are

offered seasonally. They focused on traditional Indian market by offering range of flavors

according to the taste and preferences of Indian consumers. They later expanded by

successfully experimenting with fruit flavors. There pricing was much focused on value for

money. They focused on franchise based expansion for quick penetration and faster expansion.

Retail Strategy of Natural:

Franchise model One Manufacturing hub in each city to maintain quality uniformity Indian taste and 100% veggie More focus on Home delivery (33% of sales) Fresh fruit purchase from Local Markets Affordable price – Handmade Ice cream with fruits & milk

External Analysis of Ice Cream industry

PESTEL ANALYSIS

Political aspects

The change in taxing is impacting most of the businesses in India. Milk does not attract any tax

under GST, so this way the companies producing natural milk products including ice cream are

incentivized. There a food act which is continuously being amended to suit current market

requirements to be acceptable to the consumers.

The government is also trying to strengthen the dairy sector through National Program for

Bovine Breeding and Dairy Development and other schemes.

Economic

“The Indian Ice Cream Market is estimated to be 4,000 Crores INR, and is growing at a CAGR of

15-20%. It is Projected that by 2019, the Market will Reach Around INR 6,198 Croresi”- A Study

of India's Ice Cream Market 2016, August 2016, Smart Research Insights.

The purchasing power has increased dramatically in these few years and this helping dairy

industry to produce premium products to fulfil the demand.

Social

People have become health conscious and there is a belief that ice creams give lot of calories

making people consume less ice cream than they actually want to. Some companies wanted to

capture these customers so they are introducing low fat ice creams. Also natural and gourmet

flavors in the ice cream have become very popular because of the health reasons.

Technological

The main problem in ice cream industry has always been in Cold Storage Facilities. Because of

this the rural penetration is very low. Also when it comes to natural ice creams Perishability

becomes another main problem. The company has to make sure the product reaches the

customer before expiry and also the SCM is all through cold storage which is expensive, thanks

to new technology that is making this far easier and cheaper than before.

Environmental

There is a concern about the production of milk in India. To make the cattle produce more milk

there are some injections given which might be harmful to the cattle and also people who are

consuming milk from those cattle? Also some environmentalist say that overgrazing of cattle so

as to make them yield more milk is leading to soil erosion in several regions. There are certain

measures that can be taken to avoid these. As of now, there is no education provided to

farmers to stop using such methods and to start using more natural methods.

Legal

There are strict measures any dairy company should take to ensure it maintains food standards

of India. For example, it needs to contain only a certain extent of bacterial content exceeding

which the milk product will be unacceptable by FSSR. From procurement and production to

packing and storing, the processes that the company should follow need to be taken care very

strictly to ensure quality of dairy products, else the final product can become inedible.

According to ‘FOOD SAFETY AND STANDARDS (PACKAGING AND LABELLING) REGULATIONS,

2011’ act dairy products have certain kind of packing and storage requirements, like, milk

should be pasteurized before making the product.

Also the ice creams have been differentiated from frozen desserts to educate people that

frozen desserts are not all natural and thus eliminating a little competition from frozen dessert

producers.

SWOT analysis

Below is the table of SWOT analysis to understand what Strengths, Opportunities, Weaknesses

and Threats the above mentioned externalities are causing to Ice cream industry:

Strengths Weaknesses

Increasing Demand

High margins

Problems is SCM

Competition

Opportunities Threats

Flexibility in new products

Export potential

International players

High consumer switching

INTERNAL ANALYSIS

Internal analysis is the strategic management concept of identifying and evaluating the

organization characteristics.

Most popular internal analysis model is Porter’s Five Force model.

Porter’s Five Force Analysis:

Rivalry:-

Ice cream industry is one of the competitive industry. The local Competition within the industry

is quite high. Eg – Arun Ice cream of South India. At the same time the most powerful

competitors in Ice cream industry are:

- Amul

- Mother diary

- Baskin Robbin’s

- Nirula

- Cream bell, etc.

The competitors also started adding natural ingredients to their ice creams and come up with

new flavors.

Hence Rivalry is quite high.

Threat

of

New entrants

Buyer's Power

Threat

of

Subtitute

Supplier's Power

Rivalry

Supplier’s Power:-

The ingredients here is ice cream chemicals, raw fruits and milk. They are available items with

multiple sources. However the importance of quality, timely availability and price is quite high.

Because based on them only the quality of ice cream and cost of production depends.

Hence the Bargaining power is moderate.

Buyer’s Power:-

In Indian Ice cream market the availability of unorganized and private labels is high. In addition

to that hotels also nowadays provide their own ice creams. This in turn provide more choices to

customer.

Apart from this, here there is no switching cost thereby making the flexibility to switch is quite

more.

However the uniqueness of Natural Ice cream is wide variety of fruit based ice creams which is

very less in market. Thereby giving lesser option to our targeted health conscious youngsters.

Hence the Bargaining power of buyer is moderate.

Threat of New Entrants:

Entry into ice cream industry is quite easy and less requirement of capital. But however, the

power of brand is quite good and increasing nowadays. Also natural ingredient versioned ice

creams are quite costly in productions at lower quantity and also requires special arrangements

for storing the fruits and milk ingredients.

Hence threat of new entrants in general is moderate.

Threat of Substitutes:

The most popular and growing substitute for ice creams are Yogurt, Coconut milk, Almond milk,

etc.

Currently many natural vegetable and fruit flavored yogurts were introduced. Thereby making it

a powerful threat of substitute as our main target is natural fruit lovers.

Hence threat of substitute for Natural ice cream is moderately high while in general for ice

cream segment it is average threat.

Segmentation:

The market is segmented based on geography, income and age as follows.

Geography – Urban and Rural

Income – Upper, Middle and Lower class

Age – Older generation, Youngsters and Kids

Targeting:

Natural Ice cream targeted the urban middle class youngster who loves fresh fruits and milk.

Thus they opened store outlets only in tier 1 and tier 2 cities of India.

Segmentation

Geography, Income

segment, Demographics

Positioning

Fresh, Pure,

Natural Fruit based

ice-cream

Targeting

Traditional fresh fruit

ice-cream lovers of

Urban Middle Class youngsters

Positioning:

Natural Ice cream positioned themselves as “Fresh, pure and variety of Natural fruit Ice cream

based on milk” seller

Four Ps of Naturals ice cream

Product:

Natural is a well-known ice cream brand. The name is derived from its unique offering of natural fruit ice

creams which have no artificial flavor. They are milk based with the goodness of fresh fruits, fruit pulp or

dry fruits. The flavors offered by them change according to the season, to feature the seasonal fruits.

The company is making attempts to expand themselves and in lieu of that, they have started to provide

ice cream shakes as well. The shakes are made with milk and naturals ice cream itself.

Thus in general they offer products in two categories:

Round the year varieties

Seasonal varieties

The most popular SKUs are:

Ice cream scoops

Cone, Cups

500 g packs

Shakes

Seasonal Sundaes

Family pack

Price:

Natural believe in value for pricing model and have showcased the same in pricing their ice creams. The

ice creams are priced at very reasonable rates although they are higher than the prices of its

competitors. One scoop starts with Rs 55 whereas other brands provide the most basic one at Rs 20-30.

Also, the prices are different for different states. The price range varies from Rs 55 per scoop in Mumbai

to Rs 60 in Pune and to Rs 65 in Madhya Pradesh and other Northern states, eg. New Delhi, Lucknow

etc.

Place:

The first Natural store was set up in Juhu, Mumbai. Now it has over 89 franchise outlets across South

and West India. They are spread in Mumbai, neighboring clusters of Navi Mumbai, Thane and Pune.

Some of them are scattered across some cities of Maharashtra and other neighboring states. They have

also expanded to the North zones and are trying to have a presence throughout the country. Natural

operates on a franchise model. They have various ice cream outlets in a city, with none located inside a

mall.

Promotion:

Natural is one such brand which has become popular without any kind of marketing or promotional

strategy. They do not advertise on television or in the newspaper. They rely only on word of mouth

marketing to attract customers.

Consumer Behavior:

Consumer behavior is the study of how a customer or a group customers select, purchase, utilize

and dispose product or service to satisfy their wants.

Consumer behavior usually depends on three factors namely,

1. Product

2. Person

3. Situation

Based on Testimonials, Ratings, Observation and Staff information

Product Factors:

The product factors of Natural Ice-cream are:

- Taste

- Natural

- Fruit ingredients

- Good quality

- Affordable price

Personal Factors:

The customer’s belief / reasons for choosing natural ice-cream are as follows:

- Loyalty (Regular purchases when they see nearby natural ice cream store)

- Multiple Flavors of fruits (Most Popular – Coconut, Grapes, Mango)

- Taste

- Home delivery availability during birthdays, parties and functions is good

Some Personal factors causing reduction of consumption/purchase are:

- Staff little rude in Delivery

- Mumbai Store is better in Mixing Varieties and Tastier to Customers who tried in Mumbai.

Situational Factors:

Some of the common factors influencing purchase in Natural Ice-cream stores are:

- Good Store atmosphere

- Fruit ingredient and natural (health conscious belief among youngsters)

- Word of mouth (among friends/relatives)

- Location is perfect (Shivnery Plaza & Opp Central Mall)

- Store visibility and Size makes it suitable to have talk with an Ice cream

- Climate (47% sales during Apr-June)

Perception of natural Ice Cream:

Perception map Traditional Industrial

Expensive

- Arun,BP Gelato,Walls

Affordable Natural Ice cream Amul Mother Diary

Analysis of Consumer Behavior:-

The stages of behavior of consumers in purchasing and consumption cycle are as follows:

Need Recognition

Info Search

Evaluation

Purchase decision

Post Purchase

Evaluation

A small group of 10 people taken for Consumer behavior analysis. The results are as follows:

NEED RECOGNITION:

Most of their way of need recognition is found to be life style (Natural Ice-cream – a tastier one

with fruit ingredients thereby making it suitable for this new generation of health conscious

people)

8 out of 10 showed, having Ice cream after dinner or lunch or during friends gang outing became

a social behavior.

INFO SEARCH:

Most of the Customers do not take extra measures to search about brand or availability of stores.

However word of mouth plays a huge role in customer choice. Also the availability of banners,

TV ads, etc. acts as the source of information to customers.

EVALUATION:

The evaluation varies with people based on following factors:

a. Varieties

b. Price

c. Past experience (waiting time, Taste, Staff service, etc.)

d. Purpose of visit (family outing or Friends outing)

Thus based on these above criteria usually Customers evaluate the choice of purchase.

PURCHASE DECISION:

9 out of 10 sample group stated that the main factor influencing them in purchase is the store

availability. Some of the other main factors influencing purchase decision are:

a. Store location

b. Store size and structure

c. Availability of more varieties

d. Price

e. Friends / Family

f. Store Atmosphere

g. Time (usually most of the people prefer in the evening time after 7 pm)

h. Favorite fruit ingredient

POST PURCHASE EVALUATION:

Ice cream is an immediate consumption product which usually have a short shelf life time. The

post purchase evaluation plays a huge role in

a. Customer retention

b. Customer loyalty

The main factors which are considered during Post evaluation in Natural Ice-cream are:

a. Taste

b. Availability of the variety in menu list and at the store at time of ordering

c. Natural Ice cream provide online order but many complaints about poor quality at point

of delivery compared to in store product.

d. Offers and Discounts (usually Seasonal Discounts available in Natural Ice cream stores

but however it differs with different location. Eg- Mumbai and Chennai)

e. Word of mouth about some other brand. This is a very huge influential factor as consumer

compares with the information they got and result in conclusion for next time purchase.

Inference

After Analysis using Data from Testimonials, Reviews and Sample survey, it is very clear that

Natural Ice-cream customer repetition in purchase is quite high indicting the better taste, price

and variety.

However it is also noted the Customer loyalty is something difficult to achieve in this business.

Because almost all Sample survey respondents and random Natural Ice-Cream customer stated

that even though they love Natural Ice Cream that doesn’t mean they will go or search for a

nearby Natural Ice cream Store just to eat ice-cream.

Thus Brand name and Flavor plays major role but Store Vicinity and Availability is the deciding

factor (some or willing to purchase in any nearby stores for their favorite flavor at the same or

closer price).

i http://www.businesswire.com/news/home/20170612005527/en/Study-Indias-Ice-Cream-Market-2017--