Baskin Robbins
ByShrikant Ajmera Chandan Kumar Gauri Ghatge
History
Baskin-Robbins a global chain of ice cream parlours founded
by Burt Baskin and Irv Robbins in 1953, from the merging of their respective ice cream parlours, 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
Sources: www.baskinrobbins.com www.baskinrobbins.co.uk/about_us/history.html
In India
A joint venture between MDPMC Pvt. Ltd. - US subsidiary of Allied Domecq PLC Started In December 1993(Mumbai) Initial target Upper income group in posh localities of big metros With 1500-2000 square feet outlets like US
Market expansion
Tier A, B & C cities with 127 franchisees in 60
cities
Tried to keep the taste intact
Procured raw materials from US E.g. Jamoca
coffee
Ice-cream pricing at higher end
Issues in case
Challenges in global ice cream sales Importance of alternative distribution channels Effect of sales promotion strategies
Questions for Discussion
1. Despite having operated in India for a decade, Baskin-Robbins was able to make a profit only in the 11th year. What were the mistakes the company made in its understanding of the ice-cream market and the psyche of the Indian consumer? 2. Baskin-Robbins achieved a turnaround in its business by following an aggressive distribution strategy to achieve higher sales. Briefly highlight
the various measures taken by the company. What could Baskin-Robbins
do in the future to help sustain its profit levels?
Metamorphosis (Management change )
In 2000-2001, Pankaj chaturvedi took over as
CEO - India and South Asia
He restructured distribution and sales process
Main changes
To make the business viable for profitable for franchisees companies and
Right sizing-closed unprofitable outlets in C grade cities and streamlined the distribution network Size of store reduced to 200-350 sq. ft. to decrease the fixed cost Tie-up with hotels, airlines and top end restaurants Specific targeting - Upper middle class youth
New strategies (Product and Distribution)
Concentrated on A grades cities only for expansion
Innovation-SOTF
Outlets redesigned for change in ambience (kiosk)
Started selling pre-packed ice creams in malls, theatres and other happening places
Launched new distribution points Shop in Shop
New promotion Strategies
Allocated Rs 10 million
Started joint promotion with multiplexes and malls
Consumer promotion-Two schemes 1)Brochure scheme-Offered a 50 % discount and priced at Rs 299 2)Value additive scheme-Free scoops of ice cream The paanchvi pass campaign.
The spiderman 3 campaign
MTV Roadies 6.0 Drona, Love Story 2050
Continued ..
Tie-up with Pizza-Hut Distributed as freebies with big pizzas(B2b) Capitalized on festivals and offered coupons as corporate gifts
Distribution
Outsourced distribution network Consolidated Supply Chain
Training
Spoke and hub method for training centre selection Outsourced general module on Hygiene, First aid
First taste of Success
Net profit in year 2003 (after 11 years)
A big question
How long they can sustain in the market..?
Baskin Robbins
Quality Premium
Amul
Medium Focus only on Indian flavors (The Taste of India)
Vadilal
Mediumlow 120+ flavors Mostly Indian Flavors
Quality Walls
Mediumlow Mostly Indian Flavors
Haagen Dazs
Super premium Mostly international .
Flavours 1000+ flavors, available Mostly international + some Indian flavors, (still expanding in terms of offering Indian flavors.) Other features Parlors mostly in metros and urbanized areas.
Outlets Present all over the country
Outlets Present all over the country
Outlets Present all over the country
Sources:
Book : Business statistics , case study Ice cream market in India : changing tastes
Only at select places even in the metros. E.g.: select city walk.
Suggestions
We feel that some more Indian/regional flavours should be introduced in order to attract more customers. Introduction of nutritional, low fat ice cream flavors specifically for people with diabetes and in general to take care of the growing health concerns among the customers.
Pricing suggestions:
BR should price its non-exotic products lower than current to explore the non-upper class income group as well and to compete with the lower priced brands like Amul, Vadilal which account for a huge market share
Positioning : Value Price Matrix
Quality
Price
Sources: Book : Business statistics , case study Ice cream market in India : changing tastes
Competitors
In rural areas, Kulfis and ice creams made by small cottage industry are popular Amul: 38% market share. Huge emotional connection with Indian consumers. 70,000 stores across the country! Quality Walls:14% market share. Widespread network of pushcarts present on every street corner. Vadilal:12% market share. Strong player in western India (Maharashtra, Goa and Gujarat).
Mother Dairy: 8% market share. Stronghold of North India. Its strength is the 4,000 pushcarts out on the streets.
Sources:
Book : Business statistics , case study Ice cream market in India : changing tastes
Continued
BR faces stiff competition from Amul as it has a market share of 38%
It also faces a major competition from the local producers and parlors which constitute 18% of the market share.
Sources:
Book : Business statistics , case study Ice cream market in India : changing tastes
Then & Now-The Change in Strategy
Initially started as a parlour brand, but now serving multiple channels of trade namely modern trade, food services and institutions, airlines, shipping as well as parlour operations.
Baskin Robbins is very much a franchise concept as they believe that there is rapid market penetration and growth through this .
New competitors-Desert chains CCD, Barista-Lavazza USP Franchisees and the business model. Economies of scale. Large flavour bank and multiple channels of trade. Great value to our customers- where else can you get the international quality at the same price and volume.
New frontiers-Growth
Starting 70- 80 outlets every year and we will continue to do so in future. In addition to parlours, we also activate 30 40 modern trade outlets and food service accounts every year
New Channel development
In addition to the changes in its stores, Baskin Robbins is planning to enter into grocery distribution. The October 17(2010) edition of the just-food.com website reported that the company will begin retail marketing of prepacked 100-ml cups of ice cream in grocery stores. The move, according to just-food.com, is part of the larger effort to win a wider audience for the brand.
Source: http://www.allbusiness.com
Branding-The perception game
BR has shed its perception of being a `highly priced' premium brand in the country, Baskin Robbins is today moving away from pricerelated issues and instead focussing on its product offerings.
THANKYOU!
